In ATO environments, products are assembled from components after the receipt of a customer order. The key components in the assembly or finishing process are planned and stocked in anticipation of a customer order. Receipt of an order initiates assembly of the customized product. This strategy is useful when a large number of end products based on the selection of options and accessories can be assembled from common components.
When products are too complex or customer demand is unpredictable, manufacturers may choose to hold subassemblies or products in a semi finished state. The final assembly operation is then held until a firm customer order is received. In this environment, manufacturers theoretically cannot deliver products to customers as quickly as MTS environments, since some additional time is required to complete the final assembly.