Clear to build (CTB): What is it and why is it important?

What is clear to build (CTB)?

In order to keep your production line operational and running smoothly, it requires managing a number of workflows in tandem, such as ensuring you have enough inventory to meet your build plan and avoiding supply-chain volatility. When you are scaling production, these workflows become even more challenging, especially when you’re dealing with constant changes to inbound inventory deliveries. So how can you manage your production line and its multiple workflows more efficiently?

To help track inventory availability and better manage the supply chain, procurement and supply-chain professionals use what is called clear to build (CTB). Clear to build is a tool or technique used to analyze and track the availability of inventory, such as outsourced parts or raw materials, to ensure the continuous production of goods.

With a dedicated clear-to-build (CTB) solution, you can streamline your approach to supply-chain management while making better build scheduling and procurement decisions to meet customer demand. It involves using live inventory data, the bill of materials (BOM), and inventory in transit from suppliers.

Why is clear to build (CTB) so important?

Now more than ever in this fast-paced and ever-changing business environment, supply-chain planning is crucial for success. CTB provides insights into the availability of your parts and the status of their deliveries. Clear to build also helps to organize and track data coming from the following sources:

As the term clear to build implies, once the data inputs above are collected you can run a clear-to-build analysis to ensure that all parts are available when you need them to build the final product and run a continuous production flow. 

Challenges with current inventory planning systems

The issues with clear-to-build spreadsheets  

To help plan weekly build calendars and run a clear to build analysis, procurement and supply-chain teams have historically used spreadsheets. While spreadsheets can be useful, they also come with massive limitations in managing a complex supply chain. They require loads of manual labor from exporting and combining BOM and inventory data, to updating quantities, to making sure the data is as current and accurate as possible. Due to the amount of effort required, you’ll end up with out-of-date and inaccurate data to forecast and build on. Plus, spreadsheets are not scalable, they are prone to human error, they break often, and they are difficult to share or collaborate on internally and externally. 

Traditional ERP-based material requirements planning (MRP) systems are not much better 

On the other hand, companies that have invested in traditional ERP-based material requirements planning (MRP) systems to help manage their supply chains still struggle with getting accurate, real-time data. It’s essentially garbage in, garbage out—the bad data underlying the MRP is the data that lives in the enterprise resource planning (ERP) system, which is cumbersome and difficult to manually keep up to date. 

The ERP-based MRPs are costly (we’re talking a seven to eight figure price tag), and the technology is outdated, clunky, and complex. The learning curve can be years long for individuals to learn the system, leading to error-prone and slow decision-making. 

Buyers and suppliers also often have different MRPs that don’t communicate with one another, and creating a custom integration can take months to implement and be expensive to set up and maintain. And even if a company has a system with a supplier portal in place, many of these portals only see a 30-40% adoption by suppliers, leaving manufacturers in the dark on most of them. 

Clear to build is fundamentally broken  

Even despite having an ERP, MRP, or spreadsheet system, procurement and supply-chain teams still need to manually call and email suppliers for updates on part quantities and shipping and delivery times. By the time you send an email, get a response, follow up again, process the information, and then manually enter it into the ERP or spreadsheet, the data is outdated or simply wrong. Plus, there may be issues with the supplier or delays in shipments that are not communicated timely. 

As a result, these outdated communication and collaboration tools lead to delays and inaccuracies in the data. Forecasts and assumptions are made in the clear to build plan based on the data in the spreadsheets or the ERP, so if it's not correct, the plan ultimately fails. 

Solving the clear-to-build problem 

What does an effective CTB solution look like?  

So what does an effective clear-to-build solution look like? How can we solve these broken, antiquated systems? An effective CTB tool should provide complete visibility into your supply chain and build schedule—automation and collaboration are critical.  It should integrate with your ERP system via an API and provide real-time data for your planning process, reducing the amount of manual labor needed and the risk of human error. By leveraging a purpose-built, clear-to-build software solution you will be able to:  

  1. Provide clear, accurate visibility into what parts are being delivered and when 
  2. Overcome manual process constraints and achieve greater accuracy and efficiency
  3. Improve lead times and allocation of appropriate resources
  4. Write data directly into the ERP, so orders and line changes are updated in real-time
  5. Streamline communication both internally and externally with suppliers and customers
  6. Make confident, data-driven inventory decisions and forecasts
  7. Scale more efficiently as your business grows in size or complexity
  8. Mitigate supply-chain risk and get rid of excess inventory, saving you money

Better manage your supply chain with Factor

Inaccuracies in data is one of the biggest challenges for procurement and supply-chain professionals. When the data is incorrect or outdated, it has a cascading impact on the forecasts and build plans, costing companies time, resources, and money. A solution like Factor can help manufacturing teams by feeding real-time data into the build plan, such as real supplier lead times, ultimately streamlining the production process and mitigating supply-chain risk.  

Click here to learn more or request a demo today to see how Factor can transform your operations and help you get better data from your suppliers to save money and time. Our supply chain experts are ready to provide a tailored walkthrough focused on your specific challenges and goals.

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