Configure To Order
Configure-to-Order (CTO) is a manufacturing and fulfillment model where a configured item is created and fulfilled only after a sales order is received. Buyers select from predefined options and rules; the system resolves those choices into a unique configured item/BOM, then generates supply requests, work orders, or purchase orders for make, buy, transfer, or drop-ship fulfillment.
On the shop floor, CTO shifts inventory from finished-goods racks to component staging areas. Standard subassemblies and option-specific parts are kitted only after the sales order arrives, and the configurator converts selections into a unique BOM. Planners check availability against exact components and issue a work order or purchase order to cover gaps. Warehouse teams stage materials by configuration, revision, and lot so line-side kitting pulls the right option set. Receiving and binning need stricter traceability than standard make-to-stock. If a customer changes options after order entry, the ERP can send a change request to the open work order and recalculate planning and cost rollups. Finished goods are not held for every variant, so stock exposure is reduced, but fulfillment reliability depends entirely on component availability, accurate master data, and disciplined material identification.
- Component stockout stalls final assembly: The order is accepted, but a required option-specific component is missing at kitting. CTO depends on component availability; without exact option part reservation or replenishment, the work order stalls and the ship date slips.
- Invalid configuration reaches the floor: A sales order carries an option combination that violates compatibility rules or maps to the wrong BOM. Incomplete variant logic or stale master data creates a non-executable order, forcing rework before production can start.
- Option parts lose traceability in the warehouse: Receiving, binning, or purchasing teams treat CTO components like generic stock and lose revision, attribute, or lot traceability. Misidentified materials reach the line, causing scrap, rework, and shipment delays.
Is configure-to-order the same as make-to-order?
No. CTO is a specific form of order-driven fulfillment where the product is built from predefined options and rules. Make-to-order is broader and can include more customized engineering or fabrication.
What is the main inventory strategy in CTO?
Hold inventory in components and modules, not every finished variant, then assemble or procure against the confirmed configuration.
What happens after a configuration change on an open order?
Oracle documents that the system can send a change request to the existing work order and update planning and costing to the latest configuration instead of canceling and recreating the order.