Timely delivery of orders is key for customer satisfaction and business success in the fashion world. To ensure that orders are delivered on time, businesses need to have accurate information about their inventory levels and order commitments. This is where the Available to Promise (ATP) calculation comes in, and why it is such an important feature for fashion ERP systems like ApparelMagic to have.
The Available to Promise calculation is used to determine the quantity of a product that can be promised to a customer based on the current inventory levels, existing orders, and the production schedule. Essentially, it is a calculation that tells businesses how much inventory they have available to fulfill new orders, taking into account any outstanding commitments. This information is critical for businesses to make accurate promises to their customers and avoid stockouts.
To calculate Available to Promise, the system takes into account the following variables:
On-hand inventory – the total number of products currently in stock.
Allocated inventory – the number of products that have been allocated to existing orders.
Planned receipts – the number of products that are expected to be received into inventory over a specific period.
Backorders – the number of products that have been ordered but are temporarily out of stock.
Once these variables have been calculated, the Available to Promise calculation can be made, giving businesses an accurate picture of their available inventory levels and enabling them to make accurate delivery promises to their customers.
Available to Promise is particularly important for B2B e-commerce stores, where customers often place large orders and require exact information about inventory levels and delivery times. B2B customers are also likely to be repeat customers, so it is important to build trust and maintain good relationships by delivering on promises.
Furthermore, Available to Promise is also important for B2C platforms like Shopify. Customers today have high expectations for delivery times and accurate information about product availability. When businesses offer correct details about their stock and delivery schedules, it gives customers confidence in their reliability, which creates a satisfying shopping experience. This leads to a stronger connection with customers, making them more loyal and likely to return for repeat purchases.
In conclusion, the Available to Promise calculation enables businesses to make accurate delivery promises to their customers, avoid stockouts, and build trust with their customers. Whether your focus is B2B e-commerce stores, a B2C platform like Shopify, or both types of sales channels, Available to Promise is a critical calculation that can help you keep up with increasing demand and customer standards.