What are MTS and MTO?
Make-to-stock (MTS) and make-to-order (MTO) are two fundamental production strategies used across various industries. Let's explore each approach and how to implement them in Controlata.
Make-to-Stock
In a make-to-stock (MTS) strategy, products are manufactured in advance based on demand forecasts and stored in inventory until sold. Finished products are available for immediate shipping to customers when an order is received.
This approach offers clear advantages: fast product delivery and reduced order fulfillment time. However, it also carries risks: potential excess inventory, product obsolescence, and losses from unsold items.
Setting Up in Controlata
When creating sales, select “From inventory” fulfillment. With this setting, your production runs will replenish your product inventory, and sales will deduct from this inventory.
Make-to-Order
With a make-to-order (MTO) strategy, the company begins manufacturing only after receiving a customer order. Each order is fulfilled individually, taking into account the customer's specific requirements. This approach provides high flexibility and customization, but may require more time to fulfill orders and increase production costs.
Setting Up in Controlata
When creating sales, select “Made to order” fulfillment. In this case, a dedicated production run is created for each sale, and manufactured products don't enter inventory but are immediately allocated to the sale.
Additionally, you can set the default production status to “Completed” in system settings. With this configuration, materials will be deducted from inventory immediately when a sale is created.
Combined Approach
In practice, many companies use both strategies depending on product type, season, or order specifics. Controlata allows flexible fulfillment management: for each sale, you can choose the appropriate option — from inventory or made to order. This gives you the ability to effectively combine the advantages of both approaches within a single business.