Available to Promise (ATP) in Supply Chain Management Dynamics 365 F&O

Available to Promise (ATP) 

In today’s demand-driven business world, companies can’t afford to overpromise and underdeliver. That’s where Available to Promise (ATP) comes into play — a critical tool for ensuring accurate delivery commitments based on real-time inventory and supply chain data.

What is Available to Promise (ATP)?

ATP is the quantity of a product that is available and can be promised to a customer for delivery, based on current stock, incoming supply (like purchase or production orders), and existing customer demand.

 Purpose of ATP:

• Provides realistic delivery dates
• Improves customer satisfaction
• Prevents overbooking of stock
• Optimizes supply chain planning

ATP is used heavily in ERP systems like Microsoft Dynamics 365, SAP, and Oracle to calculate when a product can be delivered to a customer based on availability.

Key ATP Concepts

1. ATP Time Fence

The ATP Time Fence is the window (measured in days) during which the system limits automatic creation or adjustment of supply plans. It defines how far into the future ATP can look when determining availability.

• Inside the fence: ATP commits orders based only on existing inventory or confirmed supply.
• Outside the fence: The system can consider future supply (like planned purchase orders or production orders).

Example: If the ATP time fence is 7 days, then for orders within the next 7 days, ATP will only use on-hand inventory and confirmed supply. No new supply will be suggested within this period.

 2. ATP Backward Demand Time Fence

This defines how many past days of demand (e.g., unfulfilled sales orders) are considered in ATP calculations. It ensures that overdue or backlogged orders aren’t ignored.

 3. ATP Backward Supply Time Fence

This determines how many past days of supply (e.g., delayed purchase receipts or production) should be included in ATP calculations.

 4. ATP Delayed Demand Offset Time

This setting controls how frequently the system rechecks unfulfilled demand from the past to determine if it can now be fulfilled.

 5. ATP Delayed Supply Offset Time

This controls how often the system rechecks the delayed supply for ATP consideration.

ATP Setup

Here’s how ATP is typically configured in systems like Microsoft Dynamics 365:

1. Accounts Receivable > Parameters >  Shipment > Delivery Control
2. Configure the following fields: ATP Time Fence: e.g., 4 days

Sales Order Preview.

As you know, I set the ATP Time Fence for 4 days; the system additionally adds a one-day buffer.

Simulate delivery dates

• ATP Backward Demand Time Fence: e.g., 5 days

Example: If set to 5 days, and there’s an overdue order from 3 days ago, ATP will still include it when calculating available stock.

• ATP Backward Supply Time Fence: e.g., 4 days

Example: If set to 4 days, and a production order was supposed to be completed 2 days ago but is delayed, ATP will still consider it as incoming supply.

• ATP Delayed Demand Offset: e.g., 3 days

Example: If set to 3 days, ATP will reassess overdue orders every 3 days to see if supply has become available to fulfill them.

• ATP Delayed Supply Offset: e.g., 2 days

Example: If set to 2 days, ATP will review delayed supply (e.g., late PO or production order) every 2 days to see if it’s now usable for demand fulfillment.

 

1. Assign these settings to the product or coverage group.
2. ATP checks can be run from the sales order form or master planning.

Real-World Example

Let’s say you sell Product X.

Inventory Status:

• On-hand: 100 units
• Sales Order 1: 60 units (due today)
• Sales Order 2: 50 units (due in 3 days)
• PO: 40 units arriving in 2 days (but delayed by 1 day)

ATP Settings:

• ATP Time Fence = 5 days
• Backward Demand Time Fence = 5 days
• Backward Supply Time Fence = 5 days
• Delayed Demand Offset = 3 days
• Delayed Supply Offset = 2 days

ATP Calculation:

• Sales Order 1 (60 units) fulfilled immediately from on-hand stock.
• Remaining inventory = 40 units.
• Sales Order 2 needs 50 units: 40 units available from inventory 40 units from PO, arriving in 3 days (1-day delay considered) ATP commits 40 units now, and 10 units from PO once available

This approach ensures:

·       Accurate promise dates

·       No over-committing

·       Prioritized fulfillment

Final Thoughts

ATP is not just about inventory — it’s about trust. It ensures that when you promise a customer a delivery date, you're backing that up with real supply chain logic. Setting up ATP parameters properly helps reduce delivery failures, improve planning accuracy, and boost customer satisfaction.