TGI - ERP Software Solution

Main Menu

The Specifics of Available and Capable to Promise Order Management for the Wholesale Distributor

by admin

A key functional element to any wholesale distribution software solution is order management. One’s ability to enter orders quickly and in an efficient manner can dramatically improve customer relations and service. As part of the order management process, a sophisticated distribution software solution should include both available-to-promise (ATP) and capable-to-promise (CTP) order management processes to ensure accurate commitment of shipment and delivery dates for customers at the time of order entry.

Available to promise means that when a customer places an order for a given item, the item is available in inventory (taking into account items that have already been allocated to previous orders). Available to promise functionality can go one step further to include a “commit to planned inventory” feature. This functionality is utilized when a sales order is placed for an item that is not currently in inventory, or is in inventory in insufficient quantity to satisfy the requirements of the customer. If there is already an existing open purchase order for that given item, the system can commit items on that purchase order to the existing open sales order based on the vendor’s delivery promise dates. Such a feature can dramatically improve anticipated shipping and delivery dates for the organization’s customers while simultaneously increasing inventory turns and lowering on-hand inventory levels.

In contrast to available to promise, capable to promise defines the ability of the organization to execute against a given customer requirement. For example, consider the situation when a customer places an order for a given item and the item is not in available inventory and there are no existing open purchase orders for the given item. In Enterprise 21, the system will alert the customer service representative in real-time that while the item is not in available inventory and that there are no open purchase orders for that item, the item is capable of being ordered, received into inventory, and shipped to the customer within a specific time frame based on the item’s lead time from a given supplier. While accounting for the item’s lead time, Enterprise 21 will immediately suggest an expected receipt date of the item into the warehouse, an expected ship date to the customer, and a final receipt date at the customer’s facility. In other words, at the time of order entry, the organization has the ability to identify its capability to fulfill the given customer order and provide an accurate shipping and delivery date for that order to the customer. Enterprise 21 can then generate a purchasing requirement and alert employees in the purchasing department that such a purchase requirement exists in the system. The purchasing manager can then analyze potential suppliers and look for discount opportunities from each supplier, submit requests for quotes to suppliers, generate purchase requisitions, and convert quotes into final purchases orders, all directly from within Enterprise 21.

By implementing available to promise, commit to planned inventory, and capable to promise functionality within the sales order management process, wholesale distributors can dramatically improve customer satisfaction, increase order and line item fill rates and inventory turns, and realize significant cost savings due to reduced inventory carrying costs.

Follow TGI on Twitter Follow TGI

Become a fan TGI on Facebook Like TGI on Facebook

Tags: , ,