What is build-to-order in SAP MFG-LPO - SAP Lean Planning and Operations (SAP LPO)?

SAP Term: build-to-order

• Component: MFG-LPO

• Component Name: SAP Lean Planning and Operations (SAP LPO)

• Description: The planning method in which a material is produced in an amount equal to its daily demand.

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• Key Concepts: 
  Build-to-order (BTO) is a manufacturing process in which products are built only after a customer order has been received. This process is used in SAP Lean Planning and Operations (SAP LPO) to create a production plan that meets customer demand. The BTO process allows for the production of customized products with shorter lead times and lower inventory costs. 
  
  How to use it: 
  In SAP LPO, the BTO process is used to create a production plan that meets customer demand. The BTO process begins with the customer placing an order for a product. The order is then sent to the production planning system, which creates a production plan based on the customer’s requirements. The production plan is then sent to the manufacturing system, which produces the product according to the plan. 
  
  Tips & Tricks: 
  When using the BTO process, it is important to ensure that the customer’s requirements are accurately captured in the production plan. This will help ensure that the product is produced according to the customer’s specifications and that lead times and inventory costs are minimized. 
  
  Related Information: 
  The BTO process is closely related to other manufacturing processes such as make-to-order (MTO) and assemble-to-order (ATO). MTO is similar to BTO in that it produces products based on customer orders, but it does not require a production plan. ATO is similar to MTO in that it produces products based on customer orders, but it requires components to be assembled before they can be shipped to customers.