How to Understand CTP - Capable to Promise in SAP APO

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Executive Summary

Capable to promise, or CTP, is a capability that requires integration between order promising and production scheduling or between GATP and PP/DS.
We cover model structures and the Strategy Planning Profile in ERP PP and the prerequisites for using CTP.

Introduction to CTM

CTM is an order based or allocation based methods of performing supply planning. You will learn the history of this allocation based functionality and technical aspects of CTM, and how CTM should be deployed.

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What is CTM?

CTP is a particular type of availability checking, which is described in this article.

Capable to promise is software functionality that allows the order management software to communicate with production planning and scheduling software to predict whether an order can be produced by a specific date. Capable to promise differs from the far more commonly available to promise as capable to promise works off of production orders that are not yet created in the system.

Also, CTP connects up GATP with PPDS, as is described in more detail in this article.

What is the History of Capable to Promise Functionality in Software?

Many software vendors have been marketing their capability to promise functionality for years without ever taking a client live. Capable to Promise is tricky, and very few software vendors have mastered it, regardless of what their sales literature says.

The Importance of Capable to Promise Proper Design

If designed properly, the functionality can be quite straightforward. The feature is used in two primary ways:

Within Application Usage: As soon as the plan has been created, one can submit a sales order. (This is converted into a production order) in real time within the application.
Integrated Usage: Sales orders can access the production planning application from the order management application through an interface. If the sales order is confirmed, the production order is created. These production orders can be made “more firm” than orders that are not connected to a sales order. It makes sense to prioritize sales orders over the forecast.

Capable of promising is a highly desirable way to interoperate with sales, and it allows the sales orders to automatically adjust the schedule. This moves the company closer to what is often considered the holy grail of supply chain management, which is make to order planning.

The Position of Companies with ERP Based MRP

Unfortunately, businesses that use ERP based MRP, which is still the majority of businesses, are in no way positioned to do this.

Instead, they have to do things in a dated and time-consuming manner, with sales calling up production planning and then asking if the order can be met. As the production planner does not have sufficient information, they are often not sure themselves and must check on several things. They must potentially move another order to accommodate this order. This simple query from sales, “can we take the order?” is a complex question.

This is because of the interaction between the movements of orders with the procurement orders that must be placed in advance of when the finished good is to be scheduled for production.

CTP is the Connection between GATP and PP/DS

It is supported by:

Characteristic dependent forecasting
Lot sizes
Finite scheduling of resources
Block Planning (Block Planning is the planning or pre-assignment of resource capacities for products with specific attributes, with the purpose of using the capacities more rationally). Perfect for the Process Industry. In the process industry, it is common for several orders to be grouped as what is known as a campaign. Because the process cannot normally be interrupted once it has begun, the emphasis is more on order level, without differentiating between the individual plants where the orders are being processed.

You can use production data structures (PDS) or product process models (PPMs) as the supply source for in-house production. These structures are used to map the BOMs and routings of the ERP system in SAP APO.) Find out more about these structures, see this article.

Prerequisites for CTP

Settings for PP/DS
Calling PP/DS using advanced planning methods
No order split, no partial delivery

The Connection to PP/DS

Planned orders and purchase reqs are both visible and are taken into account in planning, always result immediately. This depends upon whether an internally manufactured or externally procured item is selected as in Automatic Source Determination.

How About Dates?

The feasible availability date is determined in PP/DS from the result of scheduling these planned orders.

Strategy Planning Profile in SAP ERP PP

If you create or change a sales order for a finished product in the OLTP system and then save the sales order, PP/DS immediately executes the structure and product heuristic immediately for the finished product.

Which Heuristics are used for Capable to Promise?

It would be best if you used the standard heuristic:

SAP_PP_CTP Planning Shortage Quantities for CTP
SAP_PP_003, which is based on the algorithm /SAPAPO/HEU_PLAN_DEFICITS, as the product heuristic.

The heuristic SAP_PP_CTP is assigned to planning procedure 3 in the standard Customizing. This heuristic adjusts the procurement proposals for the finished product if you have reduced the requirements quantity in the sales order or deleted the sales order. To find out more about what heuristics are and how they are used across SCM, see this article.

Unwanted Product Element

For a new sales order or a moved requirements date, the CTP check creates procurement proposals for the finished product. If you increase the quantity of an already saved sales order, a new procurement element is created for the missing quantity in the CTP check. In the subsequent planning run (after saving the sales order), the new procurement element remains unchanged. The advantage of heuristic SAP_PP_CTP or SAP_PP_003 is that the procurement elements can be reused in the subsequent planning process – even if the lot sizes do not correspond to the settings in the product master. This avoids the grouping of lots that causes unwanted new procurement elements.

Stock Transfer Requirements

If a dependent or stock transfer requirement exists for a component of the finished product (or for the finished product itself), PP/DS immediately executes the action Cover dependent or stock transfer requirement immediately. This means that PP/DS creates timely receipt elements for the components and determines a feasible availability date/time. The system automatically executes Structure link source determination according to quota arrangement, priority, costs, procurement type, and dates/times. It executes detailed scheduling of orders according to the detailed scheduling strategy specified.

See this article on the source of supply for more details. If there is a change to the plan, for example, the production process model, PP/DS creates a planning file entry. In the next MRP planning run, the system re-explodes the plan for the affected orders.

Features of CTP

A feasible availability date is determined in PP/DS from the result of scheduling these planned orders (taking capacities and the product availability into account).

CTP uses the pegging structure; M-ATP uses scope of check, shortage check, and the inclusion of checking horizon.
CTP can use characteristic dependent planning, not so in M-ATP.
CTP: PP/DS orders always appear immediately in CTP, even if the planned orders are temporary.

How Commonly is CTP Deployed?

I have never seen CTP implemented at any company, and this includes both in SAP APO and in other applications such as those offered by i2 Technologies before JDA purchased them. I have a list of 100 SAP APO clients that are partial ones I have encountered and ones I have built from second-hand information. I performed a search through this list and did not find any instances of CTP. CTP is extremely difficult because it requires both GATP and PP/DS implementation, and then their effective integration. This is beyond most companies because each application is difficult to get working properly, much less getting both working at a high level interdependently. Unfortunately, some companies do not understand, and their consulting partners do not tell them how difficult CTP is to achieve. APO is not a particularly conducive environment for CTP because it has problems with far less complex functionality.