Exploring aATP Supply Creation-Based Confirmation

Opportunities when transitioning from APO PP/DS with gATP to S/4 PP/DS with aATP

6 June 2024

SAP has long been a front-runner in enterprise resource planning (ERP), continuously evolving its technology to meet global business needs. A key transition is the shift from Advanced Planning and Optimization (APO) Production Planning/Detailed Scheduling (PPDS) to the more modern SAP S/4HANA Production Planning and Detailed Scheduling (S/4 PP/DS) – formerly known as ePP/DS.

This transition marks a leap from a somewhat isolated planning tool within the broader APO suite to a fully integrated component of the S/4HANA landscape. S/4 PP/DS embeds detailed scheduling and planning capabilities directly into the digital core of S/4HANA, leveraging the power of HANA’s in-memory technology to enhance performance and real-time data processing. S/4 PP/DS has introduced several new functionalities that significantly enhance its utility and bring many opportunities for its users.

Advanced heuristics for detailed scheduling and capacity planning, combined with powerful optimisers, provide planners with tools to improve production efficiency and resource allocation. In addition, the integration with Advanced Available-To-Promise (aATP) ensures that companies can better manage their commitment to customers by checking product availability in real time during the sales process, thereby improving customer satisfaction and trust, even in complex production and planning environments.

Companies that choose to include aATP in their SAP solution can benefit from the following functionalities:

  1. Product Allocation: Ensuring a fair distribution of limited product quantities across various customer orders based on predefined rules and priorities.
  2. Supply Protection: The strategy of reserving or protecting a portion of inventory and supply specifically for key customers or important orders, ensuring that essential customers or orders are guaranteed to receive their required supplies.
  3. Alternative-Based Confirmation: Offering alternative options for fulfilling customer orders when the requested products are not available. This includes alternative delivery dates, different product configurations or sourcing from alternative locations, thereby enhancing flexibility and customer service.
  4. ATP Analytics: Analysis and visualisation of data related to the availability and promise of products to customers, helping businesses understand delivery performance, monitor allocation effectiveness and optimise inventory management by predicting future availability challenges.
  5. Interactive ATP: Allows for real-time interaction with the ATP system to dynamically adjust and confirm order commitments based on current inventory and production status.
  6. Supply Creation-Based Confirmation: Customer orders are confirmed based on a projection of future supply, rather than existing inventory.
  7. Industry-specific functionalities: Tailored features that address the unique demands and challenges of different industries, such as automotive, electronics or pharmaceuticals.

All functionalities are based on the core functionality of ATP, which is:

  1. Product Availability Check: Process that determines whether requested products are available for delivery to a customer by a specified date. This function assesses current inventory levels, future production schedules and potential supply constraints to provide an accurate promise date to the customer.
  2. Business Process Scheduling: Involves the organisation and timing of various ATP-related tasks, such as order processing, supply allocation and delivery planning. This functionality helps ensure that all processes are executed efficiently and in alignment with business priorities.
  3. Backorder Processing: Managing orders that cannot be fulfilled immediately due to unavailable products by prioritising and fulfilling them as soon as the necessary inventory becomes available.

The aim of this article is to elaborate on the opportunities introduced with aATP Supply Creation-Based Confirmation and what the process and user experience are expected to look like in the future.

We need to understand the basics of a simple ATP check 

Getting a grasp of how a simple Available-to-Promise (ATP) check works is essential to understanding the additional features of Advanced Available-to-Promise (aATP). The process helps manage the balance between available supply and production. Basically, sales and stock transport orders reduce stock levels, while production orders help replenish stock levels and fulfil sales orders. 

It is important to note that not all inventory is available for confirmation of new sales orders, as quantities may be reserved for existing requirements. Therefore, the quantity available to promise only increases when production exceeds both current and future requirements, thereby creating a surplus of supply against which the requirements can be confirmed. 

The checking horizon refers to the period where the ATP check applies. Typically, the checking horizon matches the total replenishment lead time, after which orders are expected to be fully confirmed, making ATP checks unnecessary for these orders. This emphasises the need for accurate data in planning and the importance of teamwork across supply chain roles and responsibilities. The figure below describes stock levels, receipts, requirements and quantities available to promise.

When designing the order confirmation solution for specific supply chains, companies should consider how the ATP check can be aligned with their processes and requirements to ensure the desired outcome. One benefit of the standard ATP check is that it can be customised with different checking rules for each order type, which provides flexibility during order confirmation. These checks can be configured to work at a single level, which suits a make-to-stock environment well, or at multiple levels across the supply chain for more complex scenarios such as assemble-to-order or make-to-order processes. To highlight the considerations, some of the key characteristics, design decisions and limitations of a simple ATP check are listed below.

Key characteristics

  • Used as an indication of how much is still available for customers to pull.
  • Different elements can be picked to be included in the available-to-promise calculation.
  • The outcome of the availability (ATP) check depends on the current situation of stock, requirements and receipts.
  • An easy way to provide newly received orders with a confirmed delivery date and quantity.
  • Can be implemented and works well at a single level.

Key design decisions

  • What is included in the ATP calculation (availability check scope)?
  • What is the checking horizon?
  • Can orders outside the checking horizon always be confirmed in full?

Is the availability check performed across the entire supply network (multi-level) or only looking at the checking node (single-level)? 

Key limitations of simple/standard ATP

  1. Single-level focus: Simple ATP checks operate at a single level, which means that they only consider the immediate availability of products without accounting for the complexities of multi-level bills of materials (BoMs) or dependencies across different production stages.
  2. Limited time horizon: These checks work effectively within a defined horizon where receipts and supply are predetermined. However, they perform poorly outside this horizon, as they do not consider capacity constraints or future production capabilities.
  3. Inadequacy for complex networks: Simple ATP is not well suited for complex supply chain networks that involve multi-level BoMs and require coordination across multiple stages of the network. This is a common scenario in assemble-to-order or make-to-order production environments.
  4. Lack of dynamic data integration: Simple ATP often relies on static data and does not reflect real-time changes in inventory or production status, leading to potentially inaccurate order commitments.
  5. No prioritisation mechanism: There is no functionality for prioritising between different types of customers or orders. This can be a critical limitation, especially in scenarios requiring prioritisation of strategic customers or urgent orders.

These limitations highlight why businesses with more complex supply chain requirements may look to more advanced systems such as aATP for better handling of such challenges.

Enhancements with Advanced ATP Supply Creation-Based Confirmation

The advanced ATP check introduces additional features that go beyond the basic single-level ATP check. This advanced system not only looks at supply and demand but also considers available capacity, alternative sourcing options and business priorities, such as which customers or products are most important or profitable. It examines lead times to distribution centres, checks stock availability and, if necessary, assesses the production facility’s ability to meet demand, eventually confirming the order with planned supply timelines.

The illustration below, on the left, is an overview of inputs that the SBC aATP check considers. The illustration on the right is an example of the network checking scope and possibilities of SBC, along with alternative-based confirmation.

SBC provides effective methods such as a Product Availability Check (PAC) to assess availability. By using PP/DS features, SBC can simulate, plan and create the needed supply elements when current inventories are insufficient, taking into account factors such as capacity and component availability. After running a PAC, aATP identifies the shortfall and sends this information to PP/DS for capacity and scheduling simulations. PP/DS then creates temporary supply elements, such as planned orders and purchase requisitions, to hold capacity for the complete BoM.

The benefit of this is that potential shortages can be managed and production schedules adjusted to ensure higher service levels and customer satisfaction. The integrated approach allows for real-time visibility of supply chain constraints and opportunities, enabling more informed decision-making and overall efficiency. Once the sales order is saved, the temporary elements are turned into permanent supply elements in PP/DS, ensuring a seamless transition from planning to execution. Below is an overview of the process and the functionality that owns it.

Visual insights: From customer request to confirmation with SBC

Below is an example of what the user process related to SBC could look like, illustrating the order flow from customer request to order confirmation. It is a very simple process example, but it shows the main steps towards a confirmed sales order.

  1. Request from customer: Customer calls, emails or orders via an order portal.
  2. Create sales, enter details: The order is created in the system, and all the required details are entered.
  3. Press SBC ATP check in SO: Depending on the ATP setup, an order confirmation is carried out manually by clicking the ATP check button and carried out automatically when the order is saved or handled by a back-order processing job at any selected time of the day.
  4. SBC checks supply and simulates planned order (capacity, components etc.): When the SBC is run, the system checks supply and creates temporary requirements where needed to reserve capacity for resources.
  5. Save sales order, planned order is created: When the sales order is saved, temporary orders are saved as permanent planned orders, and the sales order is confirmed accordingly.

Taking the perspective of the user and what the process looks like in S/4 PP/DS, the screenshots below show the process from sales order creation to seeing the proposed orders in the system.

First displayed is the sales order creation in the Fiori app Create Sales Order.

Once the sales order has been created, the aATP run has been triggered and the Supply Creation-Based Confirmation has been initiated, the user can see an overview of the check executed in the intermediate results view.

As long as the sales order has not been saved, the user can check the temporary requirements in the product view to see the proposed results of the ATP check.

The user can also see in order processing under Status that the application creating the temporary order is Supply Creation-Based Confirmation.

To check available capacity, the user can use the Capacity Utilization app, which shows if resources are over-utilised and provides an indication of when the order can be placed.

The order is displayed in the Advanced Scheduling Board where the user can check it and validate that it is a feasible plan proposed by the system. It is possible for the user to view the proposed temporary order generated during the check and view the permanent planned order when the sales order is saved.

Conclusion and future outlook 

The evolution to S/4 PP/DS represents SAP’s commitment to streamlining and enhancing production planning capabilities within its ERP ecosystem. As businesses continue to demand more integrated, real-time solutions for their complex supply chains, the role of S/4 PP/DS is set to expand. Future developments could include deeper AI integration for predictive planning and further enhancements of usability and integration with other digital platforms. 

The integration of Advanced Available-To-Promise with S/4 PP/DS is a cornerstone of SAP’s strategy to deliver more responsive, agile and customer-focused supply chain management solutions. By leveraging real-time data and advanced functionalities, businesses can not only meet but exceed customer expectations, driving loyalty and competitive advantage in the marketplace. Here are some of the key business benefits of integrating aATP with S/4:

  1. Improved delivery performance.
  2. Faster and more efficient order-handling and decision-making process.
  3. Transparency and increased process integration from planning to order handling.
  4. Increased accuracy of order fulfilment by using advanced algorithms and real-time data.
  5. Optimised resource utilisation.

In conclusion, understanding and leveraging the capabilities of S/4 PP/DS is crucial for IT professionals, business users and organisational leaders. It not only promises enhanced operational efficiency and planning accuracy but also paves the way for a more resilient and responsive supply chain strategy. When looking ahead, the continuous improvements to S/4 PP/DS will undoubtedly play a vital role in shaping future-ready enterprises.

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