How a Best-of-Breed WMS Fuels Integrated Supply Chain Strategies

“Available to Promise” Supply Chain Strategies in a Nutshell

ATP strategies are a highly efficient way for supply chain operators to maximize storage capacity, empower their sales department to achieve higher rates of customer satisfaction, and dramatically improve their margins.

If you’re already familiar with ATP supply chain strategies, you can skip ahead to the next section. However, if you’re still unclear on what an ATP supply chain strategy is, and what it can do for your business, then we have you covered right here.

“Available to Promise” refers to the quantity of inventory that a manufacturer can commit to selling over a fixed period of time (e.g., a month or a quarter). That quantity is calculated by adding the quantity of on-hand inventory to the quantity to be supplied, minus the inventory that is already allocated to customers. In other words:

ATP = Quantity on Hand + Supply – Demand

Advantages of an ATP Strategy

The implementation of an ATP supply chain strategy has many advantages. For one, it enables companies operating a warehouse or distribution center to maintain a leaner inventory, which maximizes storage capacity and reduces operational costs. Leaner inventories also increase stock turnover rates, which in turn reduces the chance that you’ll have to markdown the retail price of your inventory to quickly get rid of soon-to-expire items or out-of-season goods.

Another benefit to ATP is that it empowers your sales executives to improve customer satisfaction rates. Thanks to ATP data, salespeople can safely promise customers that the goods they want are indeed available and that they will be delivered on time—a huge advantage for any company promising “just in time” deliveries. By having the data to ensure they can make good on their promise, your salespeople will achieve unforeseen customer satisfaction levels. To companies with a D2C or eCommerce channel, that kind of advantage and brand recognition is often just what will set them above the competition.

Implementing an ATP Strategy

There are various ways to implement an ATP strategy. Ultimately, the maturity level of your tech stack will decide which strategies are available to your company.

For example: with a more mature technology infrastructure, where AI capabilities generate detailed demand forecast reports, it’s possible to implement a “Push ATP” strategy. In that case, the “committed inventory” will also include forecasted demand data. However, if your software architecture isn’t so mature as to include an AI application, it will make more sense to opt for a “Pull ATP” strategy. Here, demand data will be limited to quantities that have actually been allocated to customers.

There is, however, one necessary condition to the implementation of any ATP strategy: a WMS that provides an accurate and detailed representation of on-hand inventory. Short of a WMS solution that is well-fitted to your operation and adequately integrated with all your key systems, you will not have the inventory data needed to implement an ATP supply chain strategy.

How the SOLOCHAIN WMS/MES Fuels Your ATP Supply Chain Strategy

Thanks to its powerful inventory management module and agile tracking capabilities, the SOLOCHAIN WMS/MES is singularly well adapted to support your ATP strategy. From the moment inventory shows up at the receiving docks, the WMS keeps precise track of every item’s location within the facility. Meanwhile, SOLOCHAIN’s integrated MES capabilities enable the system to manage and trace every component and part before, during, and after production processes—crucial information for any manufacturer.

In short, SOLOCHAIN gives companies a clear and accurate representation of their inventory’s physical truth at all times. The WMS/MES solution also empowers them to prioritize tasks and inventory movements to best meet their ATP requirements.

Once integrated with your other systems (ERP, MRP, OMS, TMS, etc.), SOLOCHAIN communicates inventory data in real-time across your entire operation. With that information at hand, you can better decide exactly when inventory becomes ATP, whether that’s as soon as new components or parts are received, when they’ve been inspected and put away, or only when they have been assembled.

Exactly when inventory becomes ATP will differ from one operation to the next, but the golden rule will always remain the same: maximize storage capacity and stock turnover rates. SOLOCHAIN’s capabilities, and the ease with which it integrates with other systems give manufacturers the means to do just that.

Agile ATP Supply Chain Strategies in Uncertain Times

Retailers and customers are all keenly aware of the supply chain shortages that were caused by the Covid pandemic. With the crisis mostly behind us, we’re all hoping that things will return to the way they were before.

Logistic experts, however, tell us otherwise.

After months of supply shortages, many manufacturers are now flooded with incoming inventory. Components and parts that had been stuck in shipping yards are being released all at once, leaving manufacturers to deal with items they may not even need anymore. Meanwhile, supply chain operators across all industries are facing warehouse workers shortages, making it that much harder to handle fluxes of inbound inventory.

While inventory floods will eventually subside, their impacts on supply chains everywhere will continue to be felt for a long time, creating new problems for warehouse managers. In this context, one can safely expect that the ATP strategy that was efficient yesterday could prove inadequate overnight. In these uncertain times, it’s the companies that deploy the means to increase their operational agility and reduce their dependence on warehouse workers that will lead the competition.

Gartner has recognized the SOLOCHAIN WMS/MES as one of the most flexible and configurable WMS solutions of its category. Through intuitive visual interfaces, SOLOCHAIN provides supply chain operators and warehouse managers with a panoply of editing tools that enable them to rapidly adapt their workflows and processes to new circumstances—you can read more about SOLOCHAIN’s editing tools here.

With SOLOCHAIN, companies can efficiently adapt their processes and optimize the speed at which inventory is considered “on hand”. In so doing, SOLOCHAIN enables them to continuously harmonize their ATP strategy with current requirements and maintain their competitive edge.

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Gartner, Critical Capabilities for Warehouse Management Systems, 29 July 2022, Simon Tunstall, et. Al.