2 Ways to Optimize ATP Functionality with Ease

  • by Ganesh Sundaramoorthy, SAP Senior Consultant, Infosys Technologies Ltd.
  • November 1, 2006
Find out how to make your Available-to-Promise (ATP) processes in R/3 work even better by controlling how you use safety stock. Then see how you can further tweak ATP checks with the product allocation tool.
Key Concept
The Available-to-Promise (ATP) quantity is the stock available to fulfill customer orders. A critical component in logistics planning, ATP links planning and procurement processes with the order delivery dates. Companies use ATP logic to accurately promise shipments and better control inventory planning and logistics operations.

Unpredictable and extraneous factors cause supply issues, such as order backlogs. In today’s competitive environment, you must anticipate these issues to avoid significant business operation delays. One way to achieve this is through Available-to-Promise (ATP) checks — but did you know you can enhance this tool for even better performance?

Two processes can fine-tune your ATP checks. The first involves selective use of safety stock, which is the stock you always should keep on hand as a buffer for variances in demand or supply. This enables you, for example, to fulfill unexpectedly high demand or cover orders when you have production delays. Using ATP, your company could use safety stock only for certain preferred customers or special customer groups.

The second process uses the product allocation tool. R/3 provides this tool to help organizations address and control supply problems early by providing visibility into how the system allocates products. You can configure product allocation so that the system triggers it after the normal ATP check to validate against the open product allocation quantity available. The system then checks the allocation for a specified period of time, for example, each week.

Ganesh Sundaramoorthy

Ganesh Sundaramoorthy is a logistics consultant with more than seven years of consulting experience. He holds a bachelor’s degree in chemical engineering and a master’s degree in business administration. He has worked in high-tech manufacturing, the watch industry, and retail.

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