In a rapidly changing market landscape, Australian manufacturers are turning to smarter production models to stay competitive. One strategy gaining traction in 2025 is Assemble to Order (ATO)—a hybrid approach that combines the efficiency of mass production with the flexibility of customisation. As supply chain disruptions persist and customer expectations rise, ATO is proving to be a lifeline for businesses looking to balance cost, speed, and personalisation.

What is Assemble to Order (ATO)?

Assemble to Order is a production strategy where manufacturers keep key components in stock and assemble finished products only after receiving customer orders. This differs from Make to Stock (MTS), which relies on forecasting demand and producing goods in advance, and Make to Order (MTO), where production starts from scratch for each order. In ATO, the assembly process begins only after an order is placed, but subassemblies and parts are pre-manufactured and inventoried.

Example: A furniture company keeps modular sofa parts in stock, assembling the final configuration only when a customer selects size, fabric, and layout.
Key benefit: Reduced finished goods inventory, quicker delivery times, and the ability to offer more personalised products.

ATO in the Australian Context: 2025 Trends and Regulatory Updates

Australian manufacturers have faced significant volatility in recent years, from global supply chain bottlenecks to inflationary pressures on materials. In response, many are shifting towards ATO to increase agility. The 2025 update to the Australian Manufacturing Modernisation Fund (AMMF) has further incentivised investment in digital inventory systems, robotics, and modular production lines—core enablers of the ATO model.

Supply Chain Resilience: The ATO model allows for greater resilience against disruptions, as businesses can quickly adapt assembly priorities based on real-time demand.
Regulatory Support: New tax incentives in the 2024–2025 Federal Budget support the adoption of inventory management technologies, reducing the financial risk of holding large stockpiles of finished goods.
Sustainability: By assembling only what’s needed, ATO helps reduce waste and excess inventory, aligning with Australia’s 2030 emissions reduction targets.

Real-World Applications and Success Stories

Several Australian sectors have embraced ATO to sharpen their competitive edge:

Automotive: Electric vehicle (EV) assemblers like SEA Electric use ATO to offer custom battery configurations, responding to the rising demand for bespoke fleet solutions.
Electronics: Local PC builders assemble computers to customer specifications, holding key components such as CPUs and motherboards in stock for rapid assembly.
Furniture & Homewares: Retailers such as Koala leverage ATO to offer customisable bed frames and sofas, improving delivery speed while catering to consumer preferences.

These examples illustrate how ATO is helping Australian businesses reduce lead times, optimise cash flow, and elevate the customer experience—all while minimising the risks associated with overproduction.

Implementing ATO: Challenges and Tips for Success

Transitioning to ATO isn’t without its hurdles. Businesses must invest in accurate demand forecasting, robust inventory tracking, and flexible assembly processes. Key steps for a smooth transition include:

Digital Transformation: Deploy cloud-based inventory and order management systems to track components in real time.
Supplier Partnerships: Build reliable relationships with component suppliers to ensure consistent part availability.
Staff Training: Upskill teams in modular assembly techniques and agile workflows to maximise efficiency.

Despite these challenges, the long-term benefits—including cost savings, faster order fulfilment, and improved customer satisfaction—make ATO an appealing choice for manufacturers aiming to future-proof their operations in 2025 and beyond.