The process of generating the test patterns on a design via a CAD (Computer Aided Design) tool is called ATPG. Before generating ATPG, be sure to have a "DFT friendly" design. On the fly, one can not generate the test patterns on a design. The design has to saticify DFT guidelines.
ASIC (Application Specific Integrated Circuits)
DFT (Design For Testability)
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