In a make-to-order environment, an item is purchased or produced to exclusively cover a specific demand. Typically it relates to A-items, and the motivation for choosing the Order reordering policy can be that the demand is infrequent, the lead-time is insignificant, or the required attributes vary.
The program creates an order-to-order link, which acts as a preliminary connection between the supply, a supply order or inventory, and the demand that it is going to fulfill.
Apart from using the Order policy, the order-to-order link can be applied during planning in the following ways:
When using the Make-to-Order manufacturing policy to create multi-level or project type production orders (producing needed components on the same production order).
When using the Sales Order Planning feature to create a production order from a sales order.
Even if a manufacturing company considers itself as a make-to-order environment, it might be best to use a Lot-for-Lot reordering policy if the items are pure standard without variation in attributes. As a result, the system will use unplanned inventory and only accumulates sales orders with the same shipment date or within a defined time bucket.
Order-to-Order Links and Past Due Dates
Unlike most supply-demand sets, linked orders with due dates before the planning starting date are fully planned for by the system. The business reason for this exception is that specific demand-supply sets must be synchronized through to execution. For more information about the frozen zone that applies to most demand-supply types, see Design Details: Dealing with Orders Before the Planning Starting Date.