Difference between MTS and MTO

MTO - Make to Order

Make-to-order production with capacity checking enables vendors to trigger production of a requested product as soon as a sales order reaches the system. An automatic process checks machine capacity, schedules production, and determines the requested product’s availability date. This enables vendors to make immediate, reliable offers and commitments to their customers for the requested quantities and delivery dates. While particularly well-suited to high-tech manufacturers and makers of industrial machinery and equipment, this method also addresses the requirements of other make-to-order manufacturers.

MTS - Make to Stock

Make-to-stock production is designed for manufacturers that usually operate on the make-to-order model – configuring their finished goods after sales order entry – but that nevertheless manufacture the components of the finished goods in a make-to-stock process. The SAP best practice definition describes how manufacturers can accurately predict the future demand for components, communicate with suppliers of critical parts, and plan the production and distribution of finished goods, all based on actual material and capacity restrictions.