Profitable-to-promise: A New Exciting Era
Ashfaque Ahmed - December 7, 2004

Introduction

You could be following make-to-stock, assemble-to-order, engineer-to-order, make-to-order, or any of the many other variant manufacturing environments that are available to fulfill your customer orders. In all cases, you are always faced with the perennial question of how to stick to the delivery dates you have promised to your clients. In the case of make-to-stock companies, the relationship between inventory and customer service levels (read: delivery date compliance) is always a tenuous one. Even if you keep surplus stocks at each distribution point, it may not help you to achieve desired customer service levels as the product mix may not be appropriate, there may be problems in transportation etc. In the case of make-to-order companies, any link in your supply chain may fail, and you can end up with poor service levels. Even worse, your manufacturing finite capacity calculations may be wrong making it simply impossible to deliver the goods on the promised dates...