Supply Forecast and ATP calculation

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Posted on by Konrad U

804

We are trying to mimic the production planned orders in out manufacturing site with forecast supply in the sales site to get a better suggestion for an ATP delivery date. Right now orders are only released two weeks out so there is not much advice generated in sales for dates.

Forecast Supply generated nice planned purchase orders but has the forecast checkbox checked and they do not appear in the ATP calculation.

The questions is:

1. Is that correct or a bug?

2. How to include the forecast supply in ATP?

Thanks

Konrad

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Fredrik Sætre 12,644 on at

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Yes. ATP only looks at firmed orders.

You need to firm the orders or make actual changes to the ATP calculation class.

Why don't you use purchase orders in the sales company and through intercompany connect these to your manufacturing/purchasing company?

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Guy Terry 28,924 Moderator on at

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Hi Konrad,

Have you got 'ATP inc. planned orders' ticked in A/R parameters, or relevant Default order settings form?

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guk1964 10,888 on at

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Intercompany seems logical to use.

Look at CATP rather than ATP

• ATP (available-to-promise) – projected quantity of an item that will be available on a specific date and can be promised to a customer. The ATP calculation does not require mrp -it includes: uncommitted inventory, lead times, planned receipts, and known issue demands. The system uses a time fence, , to see how many receipts are available for the order you enter

• CTP (capable-to-promise) – This is used for items with a BOM. it is calculated through mrp explosion to determine how much more of the saleable item can be made in time from available components and resources to meet the required date, taking into account what is in stock and what is already planned to make.

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Community Member on at

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I think it might help to clarify what the concept of ATP and CTP represent. ATP is intended to work inside the item's leadtime, and if there is projected inventory within that time fence that is unallocated/available, it can be used towards sales commitments. Beyond that time fence, though, ATP is not technically used, it is assumed that any requirement would be met either by available supply or by generating a new planned order with sufficient leadtime. For example, if you have an item with 2 weeks leadtime and forecasted demand for the next 3 months, there would be planned orders going out for that 3-month horizon, but as those orders cross your release time fence, you'd convert them to "real" orders. Now the forecast might still be in effect, if demand time fence is shorter than leadtime (pretty common scenario), in which case the "real" order is not actually excess since it's covering the forecast requirement, but it's not allocated. Therefore, a sales order using ATP could make use of that "real" order. Another sales order coming in for the same period, assuming the first order gobbled up that "real" order's supply, would not be satisfied by the same date, so ATP would commit it for the normal item leadtime.

Now in the above, ATP is assuming that when MP runs, it will generate a planned order to cover the sales requirement with no problems since the item leadtime was used to make that commitment. What happens, though, if we can't produce the parts for that order on that date because we've sold a bunch of some other product and have reached our workcenter capacity? That's where capable to promise (CTP) comes in. Manufacturing leadtimes are often variable. CTP, instead of assuming a planned order at or beyond the products leadtime can always be met, will actually create, schedule and explode a planned order real-time in order to validate capacity and resources would be available.

So to the original post/question, if ATP is not providing the commitment date you're expecting, and you're correctly understanding how ATP is designed to work, then the first place I'd look is the product's default order settings and item coverage for leadtimes that are probably wrong.

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guk1964 10,888 on at

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I agree with those ATP comments there are many settings to consider. The same equally applies to CATP and if you are considered about better scheduling the manufacturing operation then CATP is what you need.

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Konrad U 804 on at

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Thanks for the responses. Our setup contributes to the issue. Like a lot of companies we have both a manufacturing and sales arm, essentially they are separate companies operating within one balance sheet with separate profit centers. To implement this we created separate sites for manufacturing, service parts and finished goods in one company obviously with separate warehouses.

Manufacturing plans almost a year out due to long supply lead times but only releases production orders two weeks out (which generate transfer orders to the sales site).

This limits visibility on the sales side. We do import the production plan as forecast demand records which through forecast and master planning gens the planned releasable orders in the manufacturing site.

What we are testing now to add the extra visibility:

1. We mimicked the plan forecast demand as forecast supply records in the sales warehouses.

2. We modified the ATP classes to show forecast supply generated orders.

3. We changed to CTP. The main issue there was ATP always suggesting a date 180 days out when no inventory was found. CTP warns that the result cannot be found.

Hopefully this works to restore sales visibility to the production plan.

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