What is Available to Promise ATP? Examples & Formula

“Available-to-Promise (ATP) is an essential concept in order processing and inventory management for retailers. It describes the function of determining when ordered items or services will be delivered to customers. The ATP calculation takes into account several relevant factors, such as current inventory, current orders and reservations, planned production, and typical delivery times. ATP data can help prioritize your warehouse activities based on customer demand, like picking and packing orders for popular items or optimizing the storage locations of fast-moving goods. This improves your overall warehouse workflow efficiency and helps you meet customer expectations for fast and accurate order fulfillment.

• Using inventory management software to track ATP supports your warehouse operations, particularly in the picking and packing stages.
• The availability check in the order is usually preceded by shipment and transportation scheduling.
• “Available-to-Promise (ATP) is an essential concept in order processing and inventory management for retailers.
• ATP thinks about material availability, but capable to promise (CTP) is about fulfilling what you’ve already committed.
• Companies without significant labor costs or several possible manufacturers can minimize supply chain hassles when using ATP processes.
• ATP has several key limitations that impact its effectiveness as a planning tool.

Integral Logistics Management — Operations Management and Supply Chain Management Within and Across Companies

Tracking your Available-to-Promise inventory can give your business granular insights into your supply chain and production schedule so that you’ll be able to match inventory levels to customer demand. You can make informed decisions about when to reorder products and how much to keep in stock. This optimizes your working capital and reduces the costs of holding excess inventory. ATP supply chains give businesses a competitive edge over slower, less advanced inventory management systems. This advantage is hard to create otherwise, giving customers flexible delivery options in a narrow time window and a high rate of customer satisfaction. Of course, inventory management software that uses ATP is much more complex than this, but the same principles apply.

Company

Once everything is set up, the system lets you test out the variant in real-time, and you can even make a copy of it to use with a different strategy. In simple word BOP is nothing but rescheduling of all existing orders with some specific rules with some predefined parameters. BOP was also available in ECC system with less parameters for re-scheduling. In S/4HANA now we have many parameters by which we can reschedule the orders and can allocate, distribute and redistribute the quantities between the sales orders in more efficient way. At the end of the quarter, we had 230 orders compared to 300 that were forecasted and on the Master Production Schedule, leaving us a total of 80 widgets available to promise for the third quarter.

Industry 4.0 Driven Supply Chains—Technological Advancements Regarding Logistics Service Providers

A new sales orders can then only be confirmed if the sum of the receipts exceeds the sum of the requirements quantities. A WMS can facilitate ATP management by providing real-time tracking of inventory levels and order statuses, enabling quick and accurate calculations of ATP. It can generate purchase orders if ATP is negative to prevent overselling, or notify users when ATP is positive to potentially increase sales. Pull-based ATP is based on current demand and supply without considering any forecasting predictions. It follows a similar calculation to the push-based method, but without the forecasted demand in the demand factor.

• Available to promise is the projected amount of inventory you have left available to sell, not including allocated inventory.
• As a fundamental part of effective supply chain management, the available-to-promise strategy keeps enough products available to be sold, and anticipates future required product amounts based on data-based forecasts.
• A fundamental distinction between ATP functions is based on the push-pull strategy.
• If a partial delivery is allowed, the items that are available as requested can be delivered in advance and other items are subsequently delivered.
• It is a term that is used widely in supply chain management and it is important to understand what it means for businesses.
• ATP plays an important role in many cellular processes, but how does it actually work?

Abnormal Spoilage 101: Causes, Calculation, and Prevention Explained

You get to choose the different BOP strategies you want to use and then match them up with the right BOP segments. The ‘Configure Custom BOP Sorting’ app is used to set priorities for specific values. For example, if the sort attribute is set to order type, you must define the priority sequence, such as assigning available to promise atp priority 1 to OR, followed by ZOR, and then YOR. 📌For instance, you might establish one segment for high-priority export orders and another for regular domestic orders, making sure each is handled with the appropriate strategy. Created DF_BOP_WIN with Selection criteria 1 (High) and Sort attribute with delivery priority and sales document type.

Take your own time to understand the process until your team gets confident. It even assists the customers to easily understand when they can expect the delivery for the orders placed. In this method, the calculation of ATP is based on its value in the primary schedule.

Looking for a better fulfillment solution?

Additionally, over time, with more data, businesses can refine their forecasts and production schedules, ensuring they meet customer demand efficiently. Logiwa’s WMS can generate ATP reports, helping businesses maintain lean inventory while enhancing customer experience. By providing accurate, real-time information on available inventory, Logiwa can facilitate efficient order fulfillment and inventory management. ATP contributes to improving customer satisfaction and profitability by ensuring the right amount of inventory is available to meet customer demand without overstocking. This leads to efficient inventory usage, lower storage costs, improved order fulfillment, and thus greater customer satisfaction and profitability.