Build to order

[1] BTO is the oldest style of order fulfillment and is the most appropriate approach used for highly customized or low volume products.

In general, the BTO approach has become more popular in the last few years ever since high-tech companies such as Dell, BMW, Compaq and Gateway successfully implemented the system into their business operations.

Whilst providing a rapid response to customer demand, the approach is expensive, mainly in terms of stock, but also transportation as finished goods are rarely where they are required.

Clearly, it would not make economic sense for a manufacturer of low value high volume parts to employ BTO.

[7] The main advantages of the BTO approach in environments of high product variety is the ability to supply the customer with the exact product specification required, the reduction in sales discounts and finished good inventory, as well a reduction in stock obsolescence risk.

Hence, to ensure an effective use of production resources, a BTO approach should be coupled with proactive demand management.

Finding the correct and appropriate balance of BTO and BTS to maintain stock levels appropriate to both the market requirement and operational stability is a current area of academic research.

[5] Related approaches to BTO include the following: In ETO, after an order is received, a part of or the whole design starts to be developed.