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Capable-to-Promise System (CTP System)

Definition - What does Capable-to-Promise System (CTP System) mean?

A capable-to-promise (CTP) system is a system that helps companies anticipate demand and match it to their peak production and capacities. Using a CTP system allows a business to create a balance between what it can produce and what customers and clients are requesting.

Techopedia explains Capable-to-Promise System (CTP System)

Capable-to-promise is a global way to look at demand and capacity. Many factors go into this kind of system, including raw materials for products, as well as inventory, transportation, labor and supply chain issues. By looking at all of these, a CTP system helps to really deliver accurate predictions about what is possible within the company. That is why this system is called capable-to-promise, because it measures the capability of a company to really promise results to a buying community.

One way to further define CTP is to contrast it with a similar term called availability-to-promise (ATP). The difference is that, whereas ATP looks at the availability of materials, CTP assesses the extra components, looking at labor availability, the capability of the business fleet or how materials work through a supply chain. Supporting CTP may mean involving production departments and getting other information about, again, what is possible in terms of delivery.

Capable-to-promise is just one example of an enterprise system that helps businesses solve their problems through data analysis. Cloud computing and other new advances in technology are giving businesses very sophisticated tools in terms of data analysis and forecasting, and companies are using these to their advantage to serve their clients better, streamline business processes and operate at maximum efficiency.

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