Make-to-order: producing against a customer order

Make-to-order: producing against a customer order

Make-to-order (MTO) production means you build a finished product only after you receive a customer's order. This approach reduces waste, saves warehouse space, and ensures you produce exactly what the customer wants. The build is linked to the sales order, so you can track progress and fulfill the order precisely.

Before you start

• You must have a sales order from the customer that specifies the finished product and quantity.
• The finished product must have a bill of materials (BOM) defined that lists all required components.
• You must have raw materials in stock matching the quantities in the BOM when you create the build.
• You need permission to create builds and view sales orders. Ask your administrator if you lack access.

Steps

1. Go to the sales order page. Open in Usystems

2. Open or create the sales order for the customer's request. Make sure the order includes the finished product name and the quantity they want.

3. On the sales order, look for a "Create Build" or "Produce" option. (Or, go to the assembly board and select the option to create a new MTO build.) Open in Usystems

4. Select the sales order line you want to produce (the product and quantity). Usystems automatically loads the BOM and shows you all components needed.

5. Review the components and their availability. The system checks your inventory for each raw material. If any component is low, it will alert you. Adjust the build quantity if necessary.

6. Add any production notes (optional) such as specific customization requests or special instructions from the customer.

7. Click "Create Build" or "Link to Sales Order" to confirm. The build is created and linked to the sales order. The system reserves raw materials for this build.

8. Monitor the build on the assembly board. The build appears as a pending or in-progress item, linked to the customer's order.

9. Mark the build as complete when production finishes. Move the build to "Done" on the board or click the completion button. Usystems deducts raw materials from inventory and adds the finished product to the sales order as a deliverable.

10. Invoice the customer and ship the finished goods using the sales order and invoice as usual.

Accounting impact

When you complete an MTO build:

• Raw materials are deducted from your warehouse (credited to inventory).
• Production cost is calculated (sum of all component costs plus any labor/overhead allocated to the build).
• Finished goods inventory is recorded at production cost.
• When you invoice the customer, cost of goods sold (COGS) is posted, matching the inventory value of what was shipped.

Tips & common mistakes

• Start with the sales order, not the build. Creating a build linked to an order ensures you produce the right quantity for the right customer.
• Check component availability early. If raw materials are insufficient, inform the customer of a delayed delivery date.
• Track build progress on the assembly board. Keep the customer informed if the build is delayed.
• Verify customer specifications before finalizing the build. Customizations requested after production starts are costly to change.
• Review the bill of materials to ensure no components are missing or incorrectly specified.

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