ThoughtWorthSharing Business Quintiq MPS
In customer order driven businesses (MTO environments), accepting the right orders for the right reasons, is an important step to take. Typically, a sales plan is made, that ensures the business’ preferred product mix to sell, balancing between serving the right customers, selling the right products, and utilizing the available capacity as good as possible. This is typically decided in the S&OP (Sales & Operation Planning) process. One result of this process is the agreed sales plan, which is confirmed between sales & production.
This sales plan is then used to create a sales budget (or sales quota) structure. If then a new order comes in, an ATP check (Available to Promise) can be done, to see of the order can still be accepted. This ATP is a light check, which just validates if sufficient remaining budget is available. The reason for this type of check, is to make sure that it is not just first-come-first-serve that dominates the order acceptance, because that could lead to accepting the wrong product mix, for instance by accepting a lot of low value added orders tat come in early, which then capture capacity for some preferred high value added orders that might be coming in a bit later. Result would be a below par margin, not good for the company.
As mentioned, the ATP check is not a very complicated thing, and could be implemented in the ERP system, which anyways does certain order entry checks, and could give the respective sales team member a direct feedback. But it could also be done in the planning solution, because accepting an order often is not just a sales responsibility, but also a planning/production responsibility. With DELMIA Quintiq, it is a best practice to actually take the ATP responsibility into the planning system, and elaborate it with a CTP check (Capable To Promise), which also validates if a customer order still fits in the current plan, by also validating the required production capacity, and required (input) material availability. This CTP check ensures that a customer order can be delivered on time, given the current work load throughout the whole supply chain, and it can potentially also take supplier lead times into account for input materials, if needed.
With this combined check, there is good reason to consider doing a full ATP/CTP check in the planning system, instead of doing only a light ATP check in the ERP system. That is, if this check can be done within an appropriate time window, to still give the sales executive a prompt answer if the customer order can be granted. Prompt in this context often does not mean within the second, but more within a minute or so. And our MTO solution, CompanyPlanner, is well capable to live up to that standard. An answer in a few seconds is allowing the system to do ATP, and a limited CTP, by planning on top of the existing plan, which is often good enough for the majority of the orders. But if you give the system a few minutes, it could also validate if it sees opportunities to move around some other orders, or even allow a rush-order to steal in progress material (WIP-material) from a not-so-urgent order, in favour of the rush-order, and still have both orders produced on time, by delaying the other order as far as it could be allowed.
This is a very strong capability of CompanyPlanner, which can bring big value to the customer. And that is why DELMIA Quintiq should be used to also do the ATP check in the planning solution.
