Available-to-promise (ATP) is a business function that provides a response to customer order inquiries, based on resource availability.
It generates available quantities of the requested product, and delivery due dates. Therefore, ATP supports order promising and fulfillment, aiming to manage demand and match it to production plans.
Available-to-promise functions are IT-enabled and usually integrated into enterprise management
software
Software is a set of computer programs and associated software documentation, documentation and data (computing), data. This is in contrast to Computer hardware, hardware, from which the system is built and which actually performs the work.
...
packages. However, ATP execution may need to be adjusted for the way a certain company operates.
Classification
A fundamental distinction between ATP functions is based on the
push-pull strategy. Push-based ATP is based on forecasts regarding future demand - based on anticipation of demand, ATP quantities and availability dates are computed. A prominent example is the traditional determination of ATP based on the
Master Production Schedule
A master production schedule (MPS) is a plan for individual commodities to be produced in each time period such as production, staffing, inventory, etc. It is usually linked to manufacturing where the plan indicates when and how much of each produ ...
. The push-based approach is fundamentally limited by dependence on
forecasts
Forecasting is the process of making predictions based on past and present data. Later these can be compared (resolved) against what happens. For example, a company might estimate their revenue in the next year, then compare it against the actual ...
, which may prove inaccurate. Gross ATP represents the total available supply, and net ATP represents the supply remaining to support new demands, after existing commitments to customers have been accounted for.
Pull-based models, on the other hand, dynamically allocate resources in response to actual customer orders. This means that pull-based ATP is able to balance forecast-driven resource replenishment with order-triggered resource utilization,
[Zhao, Z. (2005), "Optimization-based Available-to-promise with Multi-Stage Resource Availability", Annals of Operations Research 135, 65-85] but because resources are allocated with each coming order, the process will yield myopic results.
ATP Execution
ATP functions can be executed in real-time, driven by each individual order, or in batch mode – meaning that at a certain time interval, the system checks the availability for orders piled up in that period of time. The process is triggered by the need to check resource availability before making a commitment to deliver an order. For example, ATP calculation using SAP
software
Software is a set of computer programs and associated software documentation, documentation and data (computing), data. This is in contrast to Computer hardware, hardware, from which the system is built and which actually performs the work.
...
depends on the level of "stock, planned receipts (production orders, purchase orders, planned orders and so on), and planned requirements (sales orders, deliveries, reservations, etc.)"
References
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External links
SAP Library on Product Availability Check using ATPOracle Data Sheet on Available-to-promise (PDF)
Business terms