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When a manufacturing plant produces products that are sold in several markets it is often beneficial to sort the products that have been planned for each market into separate categories of ATP.


If two different marketing or sales organizations pro­vide forecasts for an item, and one forecast is accurate while the other is not, the error in one has the potential to create poor customer service in the other.


Manufacturing may produce enough to satisfy both forecasts, but overselling in the market with the poor forecast is likely to result in shifting products away from the market with the accurate forecast. If the inventory is treated in a first-come, first-served manner, the poor forecasters may be rewarded while the good ones suffer. Manufacturing usually ends up with the blame.



Separate the ATP information for the two markets based on what they have planned. As orders are entered, con­sume the ATP for the market from which they origi­nate. If one oversells, ATP will show there is no planned product available, but they can negotiate for more prod­uct with the marketing organization that still has ATP quantities. This becomes a non-manufacturing decision. It puts emphasis on improving the forecasts to get bet­ter service. It reduces the chances of poor service in the market that is well forecasted.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 14

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