What is Assemble-to-Order (ATO) Manufacturing ?

What is Assemble-to-Order (ATO) Manufacturing ?

ATO simplifies the process of manufacturing finished goods. These goods are standard products and are often configured by customers from Bills of material, where you can define available options for unique product configurations. Based on forecasting, subassemblies are manufactured prior to receiving the customer order and when the order is received, the stocked subassemblies and components are assembled to make the finished products. It is an environment where you open a final assembly order to assemble items that customers orders. It is manufacturing method/strategy which allows a product to be made or service to be available to meet the needs of a specific customer order. While producing finished goods on a large scale, this requires sophisticated planning processes which master schedules ATO models and options and then create work orders to build the unique configuration in WIP module while maintaining control of inventory, planning, cost accounting and Bills of Material. Planning process also anticipates changing demand for external or internal components or accessories and at the same time focuses on product customizations for individual customers.

WIP, Order Management and Shipping modules support building and shipping of ATO configurations. A discrete job is created from a configuration. An assemble to order item/assembly then can be linked to a sales order. Assemble-to-order is also an item attribute in Inventory module that you can apply to standard, model, and option class items. In Bills of Material module, a model bill can be either assemble-to-order or pick-to-order and an option class bill can be either assemble-to-order or pick-to-order. Assemble–to–Order Model (ATO Configuration) is a Model bill of material with optional items and option selection rules or Configuration manufactured from mandatory components and selected options, or purchased from a supplier. An ATO model can have ATO option class, ATO Option item, PTO Option Class and PTO Option item under it. ATO Model can be a finished good or it be a part of another bills i.e it is component on another bill. Assemble-to-Order Item is a Standard bill of material with mandatory standard components or Item manufactured from mandatory standard components, or purchased from a supplier.
For Example: Automobiles, computer manufacturing.

Suppose you want to produce a laptop computer. Then, it requires carrying case, key board, CPU, Monitor and Operating system. While defining a bills of material for laptop computer, you can define computer as ATO Model. A Model comes at the top of the configuration hierarchy, second comes the Option Class and then the Option item. Carrying case and keyboard are purchased items under the bill of laptop. CPU, monitor and Operating system are option classes and 386 processor and 486 processor are optional items under the option class CPU. Similarly ,you can have optional item under other option classes. It is quite possible that ATO Model itself is component on another bills of material.