Available-to-promise

Available-to-promise (ATP) is a business function that provides a response to customer order inquiries, based on resource availability. It involves the function of checking whether sufficient inventory is available or production capacity exists to meet the promised delivery date. ATP is a crucial component in supply chain management, inventory management, and production planning.

Overview

Available-to-promise systems use the algorithm that is applied to the data contained within the Material Requirements Planning (MRP) system to calculate the availability of material for production. If the ATP quantity is less than the customer order quantity, the ATP system can 'promise' the customer's order. The ATP system can also calculate the 'capable to promise' (CTP) quantity, which is the maximum quantity that can be produced and delivered within a specified time period.

Functionality

The ATP system is a key element in managing demand and supply. Its primary purpose is to manage customer expectations and to help the company make better decisions about order fulfillment and production scheduling. The ATP system is typically integrated with other systems such as Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) to ensure that accurate and timely information is available.

Benefits

The benefits of using an ATP system include improved customer service, reduced inventory costs, improved production efficiency, and increased sales. By providing accurate and timely information about product availability, the ATP system helps to prevent over-promising and under-delivering, which can damage a company's reputation and result in lost sales.

See also

• Demand forecasting
• Inventory control
• Production planning
• Supply chain management