Capable-to-promise (CTP) is the process of committing orders against available capacity as well as inventory. This process may involve multiple manufacturing or distribution sites.
Capable-to-promise is used to determine when a new or unscheduled customer order can be delivered. Capable-to-promise employs a finite-scheduling model of the manufacturing system to determine when an item can be achieved.
It includes any constraints that might restrict the production, such as availability of resources, lead times for raw materials or purchased parts, and requirements for lower-level components or subassemblies. The resulting delivery date takes into consideration production capacity, the current manufacturing environment, and future order commitments.
The objective is to reduce the time spent by production planners in expediting orders and adjusting plans because of inaccurate delivery-date promises.
Limitations of Capable-to-Promise (CTP)
- It is difficult to use the CTP process to schedule a complete Supply Chain Plan.
- It is not usable for delivery documents checking
- Some of the factors can have a negative influence on the performance of the CTP process like a large number of lots to be created, a large number of resources, a large number of activities per order.
- It is not suitable for SD delivery schedules
- It is not suitable for backorder processing
What is Available Capacity
Available capacity is the process that involves the determination of the potential of a unit to perform a specific task within a set time framework. The capacity to deliver an expected output varies from industry to industry.
Based on the business, the available capacity has to be ascertained. It can work in terms of volumes, quantity, and compare the same with the standard available capacity of the firm. The available capacity can be determined for single resources or a set of resources put together. The process helps in overall business planning and inventory management.
Determining the ideal working hours
The working hours of an organization are crucial to determine the production capacity of the unit. However, the working hours comprises of the breaks, technical glitches faced during those hours, and any organizational problems that might arise. Cracks are generally deducted to attain the working hours. They are also known as the theoretically available hours.
The productive working hours gained after deducting the technical and organizational problems are known as the operating time. Similarly, the capacity utilization can be used to understand the percentage of the running time of a unit in production.
The differences obtained while calculating the available capacity is known as the version number. The actual version number is further used in scheduling and planning of capacity requirements.