What is order promising?
Order promising is the process of committing to a delivery date when a customer places an order. The date comes from checking what inventory is available to promise (ATP) and, when stock falls short, what can be produced or sourced in time (CTP). It answers one question: can we deliver this order, how much, from where, and by when?
Customers want to know three things before they commit: what they are getting, what it costs, and when it will arrive. The first two are usually easy to answer. The third is not. As manufacturers and distributors run leaner, there is less finished inventory sitting in the network, so a delivery date can no longer come from a simple stock check.
This guide explains how order promising works: the methods used to set a date, how ATP and CTP are calculated, what the common delivery date terms mean, and what a reliable order promising process looks like. It draws on order promising projects we have delivered with BlueYonder, SAP, and other platforms.
Why delivery dates are hard to get right
A delivery date looks like one number, but it is the result of several moving parts:
- Less finished goods inventory. Lean supply chains hold less stock, so many orders depend on receipts that have not arrived yet.
- Allocations and contracts. In tight supply, inventory may already be reserved for priority customers, channels, or contractual service levels.
- Build to order and configure to order. When products are assembled to order, the date depends on component availability and production capacity, not just finished stock.
- Transportation. Carrier lead times, shipping cut-offs, and lane constraints sit between the warehouse and the customer.
- Channel penalties. Selling through marketplaces or to assemblers raises the stakes. A missed date can mean chargebacks, lost buy box placement, or a stopped production line at your customer.
For one computer manufacturer we worked with, the permutations were so complex that the company used a statistical average lead time on every order. When orders arrived late, customer service called to apologize; when they arrived early, customers were pleasantly surprised. That approach works until your customers start holding you to the date.
Four ways to set a delivery date
Most ERP and planning systems offer some version of these methods. Microsoft Dynamics 365, for example, calls them delivery date control methods. They range from simple and rough to precise and data-hungry.
| Method | How the date is set | Best for | Watch out for |
|---|---|---|---|
| Standard (sales) lead time | A fixed number of days from order to shipment, often estimated from past deliveries and adjusted by product rules | Stable demand, ample stock, low penalty for missed dates | Ignores actual stock and supply, so it needs extra safety inventory to hold service levels |
| ATP (available to promise) | Uncommitted on-hand inventory plus planned receipts, net of existing orders, checked against the requested date | Make to stock and distribution | Only as good as the receipt dates and order data behind it |
| Allocated ATP (AATP) | ATP, but supply is first divided among customers, channels, or regions, and each order consumes only its own allocation | Constrained supply, priority customers, contractual service levels | Allocation rules need active ownership or supply gets stranded |
| CTP (capable to promise) | When ATP falls short, explodes the bill of materials and checks component availability and production capacity to find when the order could be made | Build to order, configure to order, short-cycle manufacturing | Computationally heavy; needs accurate routings, capacities, and lead times |
Some systems also add an issue margin to the ATP date: the days needed to pick, pack, and prepare an order for shipment. It is a small detail that explains many "the system said Tuesday" disputes.
How ATP is calculated: a simple example
ATP nets what you have and what is coming against what is already promised. Suppose an item has 100 units on hand, 60 units committed to open orders, and a receipt of 200 units arriving on day 10.
| Period | Supply | Already committed | Available to promise |
|---|---|---|---|
| Today | 100 on hand | 60 | 40 |
| Day 10 | 200 receipt | 0 | 200 |
| Cumulative by day 10 | 300 | 60 | 240 |
A new order for 70 units can be promised in one of two ways: 40 units now and 30 on day 10 as a partial shipment, or all 70 on day 10 if the customer wants one delivery. Good order promising systems let customer service offer both and record the customer's choice.
Allocated ATP adds a layer. If 120 of the day 10 receipt is reserved for a key account, a regular customer can only be promised from the remaining 80. In industries with chronic shortages, such as semiconductors, AATP engines can also let a current order consume reserved stock when they can see replenishment arriving in time to cover the future commitment.
When ATP is not enough: CTP and build to order
Capable to promise picks up where ATP stops. If there is not enough stock, CTP asks whether the order can be produced or sourced in time. It explodes the bill of materials, checks component availability, and schedules against available capacity to calculate a feasible date.
Full CTP across every component is rarely necessary. For build to order and configure to order products, we typically model only the most constrained components, such as processors for a computer manufacturer, and let the rest be assumed available. Depending on the situation, we have applied either a standard lead time or an ATP check to those constrained parts. Both work; the right choice depends on how volatile the constrained supply is and how much date precision customers expect.
Delivery date terms, defined
Order promising involves several dates that are easy to confuse. Here is how they relate, in the order they occur:
| Term | What it means |
|---|---|
| Order date | The date the customer places the order. |
| Requested delivery date (RDD) | The date the customer asks to receive the goods. It is a request, not a commitment. |
| Promise date (confirmed or committed date) | The date the supplier commits to after checking ATP or CTP. It may differ from the RDD. |
| Firm delivery date | A confirmed delivery date the supplier treats as fixed. Changing it usually requires the customer's agreement, and missing it may trigger contract penalties. |
| ARO (after receipt of order) | A way of quoting lead time from the day the order is received, for example "ships 4 to 6 weeks ARO." |
| Material availability date | The date the goods are available to pick, pack, or assemble. |
| Ship (dispatch) date | The date the goods leave the facility. |
| Delivery date | The ship date plus transit time: when the goods arrive at the customer. |
A promise system works backward from the requested delivery date: subtract transit time to get the latest ship date, subtract issue margin to get the material availability date, then check ATP or CTP for that date. If supply is not there, it works forward from the earliest availability to propose a new delivery date.
What good order promising looks like
The calculation is only part of the job. The organizations that keep promises reliably share a few practices:
- Promise at order entry, in real time. Customers, sales, and customer service should be able to query availability while the order is being placed, not after.
- Set promising rules by segment. Different customers and channels warrant different service levels, allocations, and partial shipment rules.
- Let customer service act on the answer. Reps need to be able to shift availability, split shipments, or move an order out when a customer agrees.
- Re-promise when supply changes. When a receipt slips, the affected orders should be re-promised and customers told before the date is missed.
- Measure promise accuracy. Track on-time in full against the promise date, not just against the requested date, along with the share of orders re-promised.
As supply chains get leaner and customers more demanding, order promising quickly outgrows a customer service rep checking inventory on a screen. That is the point where a dedicated order promising engine pays for itself.
Order promising software
Most large planning and ERP platforms include order promising capabilities. The ones we see most often:
- BlueYonder Order Promiser: ATP, allocated ATP, and CTP with configurable promising rules, often paired with BlueYonder fulfillment and supply planning.
- SAP: Global ATP in the older APO platform, succeeded by Advanced ATP in S/4HANA.
- Oracle Global Order Promising: promising across Oracle's supply chain planning suite.
- Kinaxis and o9: capable-to-promise style checks built on their concurrent planning models.
- Microsoft Dynamics 365 Supply Chain Management: delivery date control methods from sales lead time through ATP and CTP.
The software matters less than the data underneath it. Promises built on stale receipt dates, inaccurate lead times, or missing allocations will be wrong no matter which engine calculates them. If you are weighing platforms, our comparison of BlueYonder, Kinaxis, and o9 covers how they differ.
How K3 helps
We have implemented order promising and allocation planning for manufacturers, distributors, and retailers. Whether you run SAP, Oracle, Dynamics, or another ERP, we can extract the data, model your supply chain, and recommend the promising method that fits: from tuning standard lead times to deploying a full ATP and CTP engine. Order promising also depends on good master planning and inventory optimization, so we look at the whole chain, not just the promise date. See our supply chain consulting services or talk to us about your delivery date challenges.
Frequently asked questions
What is order promising?
Order promising is the process of committing to a delivery date when a customer places an order, based on available inventory (ATP) and, when needed, the ability to produce or source more in time (CTP).
What is the difference between ATP and CTP?
ATP (available to promise) checks existing and incoming inventory that is not already committed. CTP (capable to promise) goes further when ATP falls short: it checks component availability and production capacity to calculate when the order could be made.
How is a delivery date calculated?
The system checks when the goods will be available (from ATP or CTP), adds time to pick and pack (issue margin), then adds transit time to the customer. The result is the earliest feasible delivery date, which is compared with the date the customer requested.
What does RDD mean in shipping?
RDD stands for requested delivery date: the date the customer asks to receive the goods. The supplier responds with a promise date, which may be the same or later.
What is a firm delivery date?
A firm delivery date is a confirmed date the supplier treats as fixed. Changing it usually requires the customer's agreement, and missing it can carry contractual penalties.
What does ARO mean in lead time?
ARO means "after receipt of order." A quote of "4 to 6 weeks ARO" means the goods will ship 4 to 6 weeks after the supplier receives the order.