Available to Promise (ATP) is a term used in supply chain management to refer to the quantity of a product that is currently available to be promised to customers for delivery within a specific timeframe. It represents the inventory that is not already allocated to existing orders or commitments. ATP takes into account factors such as current stock levels, incoming shipments, production capacity, and any outstanding orders or reservations. By calculating ATP, businesses can determine the amount of product they can promise to customers without risking stockouts or delays in delivery. This information is crucial for effective order management, customer service, and production planning.
Available to Promise (ATP) is a term used in supply chain management to refer to the quantity of a product that is currently available to be promised to customers for delivery within a specific timeframe. It is a measure of the inventory that is not already allocated to existing orders or commitments.
ATP is calculated by subtracting the number of products that have been allocated to existing orders or commitments from the total available inventory. This calculation takes into account factors such as current stock levels, incoming shipments, and any outstanding orders or reservations.
The ATP value is important for businesses as it helps them determine the quantity of products that can be promised to customers without risking stockouts or delays in delivery. It allows companies to make accurate promises to customers regarding product availability and delivery dates.
ATP is typically used in industries with high demand variability and limited inventory, such as fashion, electronics, and automotive. By continuously monitoring and updating the ATP value, businesses can effectively manage their inventory levels, optimise order fulfilment, and improve customer satisfaction.
In conclusion, available-to-promise is a crucial concept in supply chain management that helps businesses determine the quantity of products that can be promised to customers for delivery within a specific timeframe. It enables companies to make accurate promises regarding product availability and delivery dates, ultimately improving customer satisfaction and optimising inventory management.
Q: What is Available To Promise (ATP)?
A: Available To Promise (ATP) is a business process that determines the quantity of a product that can be promised to a customer at a specific point in time. It takes into account the current inventory levels, incoming supply, and existing customer orders.
Q: How does ATP work?
A: ATP calculates the available quantity of a product by subtracting the quantity already allocated to existing customer orders and the quantity on hand from the total quantity in stock. It considers the lead time for incoming supply and any other factors that may impact availability.
Q: Why is ATP important?
A: ATP is crucial for businesses to manage customer expectations and make accurate promises regarding product availability. It helps prevent over-promising and under-delivering, ensuring customer satisfaction and maintaining a healthy supply chain.
Q: What factors are considered in ATP calculations?
A: ATP calculations take into account various factors, including current inventory levels, incoming supply quantities and lead times, existing customer orders, production capacity, and any other constraints that may affect product availability.
Q: Can ATP be automated?
A: Yes, ATP calculations can be automated using advanced software systems that integrate with inventory management, order management, and supply chain systems. These systems can provide real-time visibility into product availability and automate the promise-making process.
Q: How accurate are ATP calculations?
A: The accuracy of ATP calculations depends on the quality and timeliness of the data used, as well as the sophistication of the software system used for calculations. With accurate and up-to-date data, ATP calculations can provide a reliable estimate of product availability.
Q: Can ATP be adjusted in real-time?
A: Yes, ATP can be adjusted in real-time as new information becomes available. For example, if a customer cancels an order or if there is a delay in incoming supply, the ATP calculations can be updated to reflect the changes in product availability.
Q: Can ATP be used for multiple products?
A: Yes, ATP can be used for multiple products simultaneously. The calculations can be performed for each product individually or aggregated at a higher level, depending on the business requirements.
Q: How can ATP help with demand planning?
A: ATP can provide valuable insights for demand planning by analyzing historical data, customer demand patterns, and product availability. It helps businesses forecast future demand accurately and make informed decisions regarding production, inventory, and supply chain management.
Q: Are there any limitations to ATP?
A: ATP calculations are based
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This glossary post was last updated: 11th April 2024.
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