What Is Make-to-Order (MTO)?

Make-to-order is a production strategy in which an item is produced or purchased to cover a specific demand, such as a customer's sales order, rather than being built ahead for stock. Microsoft's Business Central documentation describes a make-to-order environment in exactly those terms: an item is purchased or produced to cover a specific demand.

Business Central handles make-to-order in three places:

• Reordering policy: the Order reordering policy is typically used for items where demand is infrequent, the lead time is insignificant and required attributes vary. Business Central creates an order-to-order link, a preliminary connection between the supply and the demand.
• Manufacturing policy: the Manufacturing Policy field on the item card can be Make-to-Stock or Make-to-Order. With Make-to-Order, the planning system analyzes the item's production BOM and creates linked order proposals for lower-level items that are also defined as make-to-order.
• Order planning: Business Central's documentation lists its Order Planning page for make-to-order environments or one-off demand, where you manually go through each unplanned demand line and decide how to fulfill it.

Business Central also applies the order-to-order link when you use sales order planning to create a production order from a sales order.

• Make-to-order: supply starts from a specific demand, and each supply order is linked to it.
• Make-to-stock: the item is replenished to inventory and sold from stock. In Business Central, with the Make-to-Stock manufacturing policy, the planning orders concern only the item itself.
• Assemble-to-order: a middle path for assembled items. Business Central creates an assembly order automatically when you enter an assemble-to-order item on a sales order line, with a one-to-one link between the two. Its documentation suggests this for items you don't want to stock, for example because you customize them for customer requirements or want to minimize the cost of on-hand inventory.

A manufacturer of steel enclosures gets a sales order for 40 enclosures with custom cutouts at $310.00 each, or 40 x $310.00 = $12,400.00.

• The enclosure is set up as make-to-order, so planning creates a production order for 40 units linked to that sales order.
• The custom door panel inside it is also make-to-order, so planning adds a linked order for 40 panels.
• Standard hinges are make-to-stock and come from inventory.

Nothing is built until the order arrives, and each unit produced already has a buyer.

Shopify's guide to setting up inventory names made-to-order products in two places:

• Continue selling when out of stock: this setting lets customers purchase products even after the inventory reaches zero. Shopify lists made-to-order items that you produce after receiving orders as one use, alongside pre-orders. The setting doesn't apply to Shopify POS.
• No inventory tracking: Shopify suggests considering not tracking inventory for made-to-order products, such as custom items created after purchase.

Uncap's guide to Sage 100 and Sage 300 on Shopify B2B covers Sage 100 manufacturers with the Production Management module: when a Shopify order includes a made-to-order item, the integration can trigger work ticket creation in Sage 100 rather than simply decrementing finished goods inventory. Those work ticket triggers can be built during implementation on top of Uncap Connect; they are scoped during discovery and are not part of every implementation.

• Make-to-stock (MTS)
• Material requirements planning (MRP)
• Lead time
• Sales order
• Backorder

• Microsoft Learn: Design details, planning parameters (Business Central)
• Microsoft Learn: Design details, handling reordering policies (Business Central)
• Shopify Help Center: Setting up inventory for the first time