ETO, MTO, ATO and MTS (design by order, production by order, assembly by order and production by inventory)

Manufacturing enterprises can be divided into ETO, ATO, MTO and MTS according to the characteristics of enterprise production organization (by single design, by single assembly, by single production and inventory production) four production types.

Design by Order (Engineer To Order, ETO)

In this production type, a product is designed to a large extent according to the requirements of a specific customer, therefore, supporting custom design is an important function and component of the production process. Because most products are customized for specific customers, these products may be produced only once. In this production type, the product production batch is small, but the design work and the final product are often very complicated. In the production process, each task must be specially processed, because each task may have different operations and different costs, which must be completed by different personnel. Of course, in addition to the special materials for this product, there are also some raw materials shared with other products.

Make To Order, MTO)

Single-order production is to design and manufacture the products required by the customer based on the customer's order. The production plan is to plan the production schedule and purchase raw materials based on the product BOM specified in the received order, the product can be manufactured based on the customer's special requirements and the inventory can be minimized.

Assemble To Order, ATO)

In this production type, the customer requires certain configuration of parts or products, and the manufacturer provides customized products for the customer according to the customer's requirements. Therefore, the manufacturer must maintain the inventory of a certain number of parts so that when the customer orders arrive, the product can be quickly assembled according to the order and sent to the customer. Therefore, some types of configuration systems need to be used to quickly obtain and process order data information, and then organize product production and assembly according to customer requirements to meet customer needs. Production Enterprises must have different components and prepare Multiple Flexible assembly workshops to assemble a wide range of products in the shortest time.

Inventory production (Make To Stock, MTS)

In the type of inventory-based production policy, the customer basically has no suggestions or requirements for determining the final product specification, and they have little investment. The products produced by the producer are not customized for any specific customer. However, the batch production by inventory is not as large as the typical repeated production. In general, such products may belong to popular commercial products with general specifications, or may be enterprise-owned branded products; it determines whether to arrange the production plan based on the market demand and its inventory.

Appendix: enterprise type (ODM, OBM, OEM)

OEM (Original Equipment Manufacturer)

It means the original equipment manufacturer, but it refers to a "OEM" method. The equipment manufacturer develops and designs and controls the entire sales channel by taking advantage of its core key technologies, however, specific production and processing tasks are handed over to other enterprises.

ODM (Original Design Manufacturer)

It means that the original design manufacturer is the producer who carries out the overall design and owns the intellectual property rights. The products designed by the producer are also sold by other enterprises by the agreement of both parties, this can save the cost of re-design, that is, the former (design manufacturer) is the latter (other enterprises) of the ODM.

OBM (Original Brand Manufacturer)

It is a term that has become popular in recent years. A producer creates a product brand and produces and sells a product of its own brand. It is also considered that the acquisition of existing brands by way of franchising is a part of the OBM.