MANUFACTURING NEXT

Agile Available to Promise (ATP) Transforms Customer Experience to Drive Business Growth

 
March 11, 2019

With increasing adoption of digital and e-commerce across the manufacturing industry, businesses are faced with a critical challenge of improving customer experience. This is especially true in a dynamic market environment, where businesses need to handle a large number of shipments and deliver them to customers directly from the factory, in the shortest possible time. Ensuring optimal flexibility and top service quality is yet another mandate. How can businesses achieve all this?

The answer lies in adopting an agile, sophisticated, easy to use and integrated Available to Promise (ATP) solution that eliminates the need for multiple ERP / Add-On / Third-Party systems while offering depth, breadth, and flexibility to address customer specific requirements. This enables intelligence and helps organizations respond optimally even in highly demanding situations.

Agile ATP: An essential piece to managing your supply chain       

In today’s hyper-competitive world, an Agile ATP with advanced functionalities is a critical differentiator. Some of the functionalities include aggregation of sales requirements data in real-time, dynamic product allocation, and rule / pre-defined KPI based update of confirmations. In addition, Agile ATP enables manual redistribution of quantities based on company prioritization strategy and supports product segmentation.

Let’s take a look at a few examples to understand why Agile ATP is indispensable.

Scenario 1: Let’s say there is a huge demand for a specific model or a variant of a car, and the existing production capacity is unable to fulfill the total demand. The Automotive Original Equipment Manufacturer (OEM) has to manage the constraint of limited production capacity effectively and respond in a manner conducive to profitable business growth. Agile ATP will enable Automotive OEMs to define automated business rules for prioritizing orders from more profitable customers and sales channels. This ensures that higher priority orders are fulfilled first by confirming the quantities based on business priority rather than order creation time, resulting in improved profitability.

Scenario 2: Consider another example of a computer manufacturer who uses multiple sales channels such as e-commerce, value-added resellers (VARs), retail, and direct sales to improve sales and maximize customer acquisition. If the ATP system does not provide visibility across various sales channels, the computer manufacturer will not be in a position to manage the delivery processes efficiently. An Agile ATP system, on the other hand, enables accurate multi-channel visibility, improving demand shift management and ensuring delivery fulfillment as per the original commitments.

Scenario 3: Agile ATP is also beneficial to industrial manufacturers, selling spare parts and consumables as part of their maintenance and services portfolio, in addition to industrial equipment. It can help them offer a superior call center experience to customers and improve cross-sell and up-sell opportunities by enabling simple and fast ordering. How does it do this? By significantly improving the effectiveness and response times of call center employees while taking customer orders over phone.

It is important to consider that available to promise calculations vary based on push and pull production strategy. In case of a push strategy, the available quantities and due dates are calculated based on forecasts for future demand. In case of a pull strategy, the available quantities and expected due dates are calculated only when customer orders are received. In addition, ATP calculations vary based on type of industry, company strategy, business model (B2B / B2C), product category, and individual customer demands. An Agile ATP is capable of handling all these variations and facilitates informed decision making by aggregating and analyzing data from multiple planning, inventory management, warehouse management and logistics systems.

Using an evaluation framework to build a robust ATP strategy

Agile ATP, if deeply embedded in the core digital business solution, can be a critical business driver helping organizations gain significant benefits.

The following evaluation framework will help business leaders measure the agility of an ATP solution, before finalizing and implementing an ATP strategy (see Figure 1). Agility of an ATP solution is directly proportional to the number of parameters of the framework that it fulfills. A truly Agile ATP solution will satisfy most of the parameters provided in the framework, enabling organizations to position their delivery and customer service capabilities as a major differentiator and  grab market opportunities faster.

                                                                                        Figure 1: Agile ATP Evaluation Framework

 

With Agile ATP, both customers and businesses stand to benefit

Agile ATP is a business rules driven IT system, and it is therefore extremely important for all business stakeholders to be fully engaged, aligned, and involved right through the key stages of Agile ATP implementation. The stages include planning, design, build, testing, training, go-live, organizational change management, and establishment of new ways of working. This enables effective usage of Agile ATP.

When implemented well, Agile ATP can help enterprises better tailor product delivery to individual customers, thereby reducing the number of customer complaints and improving customer satisfaction. The bottom line: when manufacturers become more customer-centric by creating superior value for customers, they can not only create strong competitive advantage but also drive business growth.

 

 

Ganesh Rajan is a Managing Consultant with the Innovation and Transformation Group in the Manufacturing Business Unit at TCS. Ganesh is an expert in leading IT Advisory, Technology Strategy Consulting, and SAP / Digital Assessment engagements for clients across automotive, industrial, aerospace, and process industries. Ganesh has more than 15 years of experience working with customers across the globe. He has an MBA from Symbiosis Center for Management and HRD, Pune, and a B.Tech degree from National Institute of Technology, Warangal.