Posted in Operations and Supply Chain Terms, Total Reads: 249
Definition: Profitable to Promise
Profitable to promise are softwares that evaluates supply chain management, customer relationship management, financial data etc and calculates the profitability of individual orders for companies based on these calculations. Profitable to Promise or usually know as PTP is an accepted addition and grouping of the order capability and Sales and Operations Planning procedure.
In the order promising level PTP permit companies to contrast in a real-time way the attainable proceeds from a real client order to the opportunity cost or the profit connected with a forecasted Customer order that may devour the same. This ability moves beyond current Capable to Promise functionality that confirms that adequate manufacturing capacity & work-in-progress is accessible, and Available to Promise that checks account alongside current orders. PTP raise the conclusion focal point from “Should I take orders?” to “Can I take orders?”
The complexity of the expertise needed to achieve PTP is quite notable, as is the business process definition in the company that is undertaking to answer such questions. The quest for excellent and superior customer service is driving companies to answer such questions. Though, simply allocating orders throughout the supply chain and venture planning systems is not enough to attain the dates. ATP and its other parts such as CPT and PTP do not help companies meet dates. They assist companies in promising dates that they hope to meet. The altitude of hope is delicately tuned when the planning systems and implementation systems are integrated and coordinated inside their organization as well as between their customers and suppliers. When this real time integration is achieved the planning engines can make suitable and precise promises. When demand exceeds contribution then the engines can help industries make better, well-versed decisions. Order promises will keep on to be made and promises will be broken. PTP will help companies more than ever understand the impact of their decisions. The question that arises is- Which order is to be physically satisfied is still down to the supplier?
When hold up by an integrated solution together with the components listed above, Profitable to Promise can be achieved. Organizations can now surpass inventory availability and industrialized capacity (ATP and CTP) to believe the bottom-line impact of value chain decisions. PTP go forward beyond more effectual planning to provide intelligent evaluation of alternatives in a real-time environment. Further, Goal-Oriented Sales and Operations Planning present a device to resolve the optimal mix of products to sell in order to maximize profits while observing critical resource restrictions.