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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. In Retail, an occurring problem may be customers choosing an alternative product that is available at that time and place, as they are not willing to wait for the BTO product to arrive. Moreover, compared to mass production, customization of products implies higher costs. Thus, price-conscious customers may be turned away, as they do not feel a strong need for customized products and would therefore choose a more standardized product instead.
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exact or very close match to the customer's desired vehicle within the dealer networks and supplier parks. The vehicle can then be delivered as soon as transport can be arranged. This has been used to justify stock levels. 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. Holding stock of such a high cash value as finished goods is a key driver of the current crisis in the automotive industry - a crisis that could be eased by implementation of a BTO system.
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to a supplier order, effectively BTS. Part of the challenge in a BTO supplier network is in the identification of which suppliers should be BTO and which BTS. The point in the supply chain when this change occurs is called the ādecoupling pointā. Currently, the majority of automotive supply chains lack a decoupling point and the dominant BTS approach has resulted in billions of dollars of capital being tied up in stock in the supply chain.
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The main disadvantage of BTO is manufacturers are susceptible to market demand fluctuations leading to a reduced capacity utilization in manufacturing. Hence, to ensure an effective use of production resources, a BTO approach should be coupled with proactive demand management. Finding the correct and
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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. Additionally, flexibility
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A BTO system does not mean that all suppliers in the supplier chain should be producing only when a customer order has been confirmed. Clearly, it would not make economic sense for a manufacturer of low value high volume parts to employ BTO. It is appropriate that these should be identified and built
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approach where products are not built until a confirmed order for products is received. Thus, the end consumer determines the time and number of produced products. The ordered product is customized, meeting the design requirements of an individual, organization or business. Such production orders can
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BTS is the dominant approach used today across many industries and refers to products that are built before a final purchaser has been identified, with production volume driven by historical demand information. This high stock level, endemic across the auto industry allows some dealers to find an
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In an automotive context, BTO is a demand driven production approach where a product is scheduled and built in response to a confirmed order received for it from a final customer. The final customer refers to a known individual owner and excludes all orders by the
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This strategy requires that basic parts of the product are already manufactured, however not yet assembled. Once a customer's order has been received, the parts of the product are quickly being assembled and sent out.
120:. 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.
194:, after an order is received, a part of or the whole design starts to be developed. Construction by general contractors and plant construction by engineering companies are categorized as ETO.
137:. BTO excludes the order amendment function, whereby forecast orders in the pipeline are amended to customer requirements, as this is seen as another level of sophistication for a
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products. Industries with expensive inventory use this production approach. Moreover, "Made to order" products are common in the food service industry, such as at restaurants.
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production system, as components or products are only delivered just in time when demanded, in order to reduce wasted time and increase efficiency.
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Some firms build all their products to order while others practice (BTS). Given the widespread proliferation of products, there are a number of
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and customer lead time are improved to a match changes in consumer demand. Moreover, a businessā cash flow can be increased with BTO.
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taking a combined approach, where some items are BTS and others are BTO, which is commonly referred to as "hybrid BTO".
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be generated manually, or through inventory/production management programs. BTO is the oldest style of
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Implementing build-to-order strategies: enablers and barriers in the
European automotive industry
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Computer shop in Paris. Advertised configurations are customizable and assembled upon order
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300:āThe Second Century: Reconnecting Customer and Value Chain through Build-to-Orderā
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Together with the BTS approach, these strategies form the spectrum of
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30:"Made to Order" redirects here. For the television program, see
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423:"Made To Order - the new fashion formula in men's suit market"
374:āSuccessful Build-to-Order Strategies start with the Customerā
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International
Journal of Automotive Technology and Management
34:. For the real estate development scheme in Singapore, see
343:, Volume 195, Issue 2, 1 June 2009, Pages 319–334.
337:"Modeling and analysis of build-to-order supply chains"
141:(BTS) system (also known as build to forecast (BTF)).
355:Roehrich, J.K.; Parry, G. and Graves, A. (2011),
182:Related approaches to BTO include the following:
302:, Cambridge, MA and London, UK: The MIT Press.
77:and is the most appropriate approach used for
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274:āBuild to order - Inventory Management Modelā
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321:'Build to Order: The Road to the 5-Day Car'
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434:āBuild-to-Stock or Build-to-Order?ā
319:, G. and Graves, A., Eds. (2008),
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32:Made to Order (television series)
198:Assemble to Order (ATO) approach
186:Engineer to Order (ETO) approach
372:Holweg, M. and Pil, F. (2001),
298:Holweg, M. and Pil, F. (2004),
131:original equipment manufacturer
388:Leanmanufacture Japan (2019),
124:BTO in the automotive industry
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210:strategies a firm can adopt.
526:Production and manufacturing
56:: sometimes referred to as
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438:AdvancedManufacuturing.org
405:, Retrieved June 08, 2019.
392:, Retrieved June 08, 2019.
323:, London: Springer Verlag.
289:, Retrieved June 08, 2019.
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427:Be Global Fashion Network
403:āAssemble to Order (ATO)ā
499:Assemble-to-order system
272:Leanmanufacture (2019),
245:Assemble-to-order system
88:BTO can be considered a
432:Continelli, A. (2017),
287:āBuild to Order (BTO)ā
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401:Investopedia (2019),
390:āMake to Order (MTO)ā
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36:Build to order (HDB)
419:Kabaivanova, Silvia
285:Techopedia (2019),
27:Production approach
429:. 15 January 2015.
235:Mass customization
178:Related approaches
90:Just in Time (JIT)
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