Producing to Order

What is producing to order?

• Producing to order is an approach to the production of an item that begins only after a customer order is received

Benefits of producing to order:

• Lower levels of finished goods in inventory = lower inventory holding costs and less risk of obsolescence

• Greater customer satisfaction = customers get what they want

Drawbacks of producing to order:

• The capacity to produce to order may be limited; although mass customisation is automated, it doesn’t work for all products

• It may be difficult to handle sudden or unexpected increases in demand

Examples of producing to order:

• Most restaurants match demand with supply by using produce to order. You order what you'd like from the menu and the production process begins! As a restaurant customer, you might make some specific requests about your food which can be incorporated into production