The age-old salesperson’s nightmare is “Oh NO, we’re out of stock” and it’s usually followed by the panic-stricken question “When is the next supply due in?” or “When can we deliver to our customer?”.
The question of what product quantity can be promised to a customer on a specific date can be a complex question to answer, especially if the product is manufactured from several components and materials with long lead times. For the ERP system to answer this question accurately several incremental steps in functionality may be required.
The system QoH (Quantity-on-hand) stock may already be committed to other customers. In some systems the ATP (Available to Promise) quantity goes some way toward indicating the un-committed stock plus production quantity that can be promised to a new customer demand. But what if the ATP quantity is insufficient for the customer’s needs? On what date can the customer expect a full delivery?
Luckily there is a more agile and expedient solution, CTP (Capable to Promise) feasibility testing, which can answer our delivery date question in seconds.
The CTP process checks both material and resource availability using the product bills and routings. It skips out an incremental pre-specified number of days until all materials and resources are available. The CTP then displays the earliest available date.
During the CTP process it creates planned work orders and planned purchase orders then, when the customer commits to the calculated delivery date, the planned orders are saved to the database. The CTP plans integrate with the normal MRP plans.
Users of the CTP function have achieved impressive improvements in lead times and delivery performance.
Traditional MRPII planning methods will answer this question given an hour or more.
The traditional MPS (Master Production Schedule), MRP (Material Requirements Planning) and CRP (Capacity Requirements Planning) processes in a closed loop will answer the question given time. This process will take several iterations as MRP does not adjust planned order supply dates according to material and resource availability and takes no account of existing work centre loadings.
The Intuitive ERP Planning software provides this Capable-to-Promise (CTP) functionality.