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Management Paper: Optimizing the order promising process - The journey from ATP to CTP

 

Manufacturing companies must be true to their word – if they make a promise to their customers, they need to be able to fulfill this promise or else risk losing business and market share to competitors.

Every time a manufacturer gets a customer order, they must be able to make a decision – based on their available inventory, supply, and capacity – about exactly when and how much they can deliver. This decision forms the basis of their promise to the customer. Even before the receipt of a purchase order, manufacturers are requested to provide their promise on customer inquiries and based on this information either they receive the order, or they lose the sales opportunity.

And, as we all know, there’s a lot riding on that promise – it must be reliable and determined by an accurate calculation and not a best guess.

Generally speaking, there are two main methods of order promising: available to promise (ATP) and capable to promise (CTP).

In this management paper, we explain why an increasing number of manufacturing companies are utilizing CTP functionality to boost delivery performance and reduce costs.