“You know how to take the reservation; you just don’t know how to hold the reservation.” If that sounds all too familiar, it’s probably because you’ve heard it before, perhaps even more than once.
It’s one of the most famous quotes from the 1990s hit comedy series Seinfeld that is still very popular today.
The quote was from a scene in which the star of the series, Jerry Seinfeld, walks into a car rental to pick up a mid-sized car he had reserved earlier. The car rental agent checks her computer, acknowledges Jerry’s reservation but then responds to him that unfortunately the agency ran out of mid-sized cars. Frustrated that despite making a reservation he still can’t get his car, Jerry responds to the rental agent saying, “So you know how to take the reservation, you just don’t know how to hold the reservation. And that’s really the most important part about the reservation… It’s the holding, anybody can just take them.”
I played this scene at a couple of my SAPPHIRE NOW sessions in Orlando last month to demonstrate the importance of a critical feature in SAP S/4HANA known as “available-to-promise” or ATP.
And even though this Seinfeld scene is from the 1990s, the reality is that there are many companies today that make delivery promises to their customers without knowing for sure whether they can keep these promises.
What is ATP?
ATP is a function provided by supply chain or operations to help businesses confirm order delivery dates based on actual supply chain and manufacturing resources as opposed to historical lead times and averages. ATP provides this confirmation by looking into enterprise resource planning (ERP) order management systems analyzing data like sales orders and reservations and comparing them against existing warehouse stock and planned orders and receipts.
It then provides a confirmation with a date, quantity and location and locks in the supply chain resources ensuring that other incoming orders don’t interfere with existing confirmations leading to delivery delays, broken promises and unhappy customers — like Jerry Seinfeld.
ERP ATP vs SAP S/4HANA ATP
For years, ERP systems handled ATP capabilities. Although the approach was easy to use and implement, it did not offer the breadth of functionality most businesses needed to keep with an increasingly digitally empowered customer base. For example, availability checks were done on a first come first serve approach which prevented businesses from aligning their order promising with their business strategies and priorities as demonstrated by the multichannel order promising use case in the session recording.
Companies, which required this advanced order promising functionality, relied on secondary solutions – such as the SAP Advanced Planning and Optimization (SAP APO) component or other third-party solutions. Needless to say, this strategy introduced a high degree of complexity to the IT infrastructure and the business users. Having two systems to maintain – instead of just one – creates a whole new set of problems for data quality and latency.
I’ve argued before that such technology limitations, rooted in the underlying classical database of ERP, forced most companies to compromise on the service their customers wanted for the service that was available. They could either deal with the narrow capabilities of ATP in an ERP system or put up with the added complexity of a standalone advanced ATP solution.
Fortunately, these challenges are now resolved in SAP S/4HANA advanced ATP, which combines the best of both worlds offering customers a solution that is both easy to use and implement and at the same time offering them the advanced capabilities they needed to align order promising with their companies bottom line.
To learn more about the new enhancements of advanced ATP in SAP S/4HANA and how they can impact your company’s order promising you can watch the 20-minute SAPPHIRE NOW session on ATP here or download the SAP S/4HANA advanced ATP SAPinsider article here.