Theory of Constraints Handbook - James Cox Iii [214]
For any environment where more than 500 buffers are required, the recommended solution is to get external software, which is fully focused on the TOC processes and decision making.
For an environment where an ERP system is operating effectively and more than 500 buffers are required, the IT staff should read and study this chapter closely before undertaking the development and integration of the TOC distribution/replenishment solution into their existing ERP. This is far from an easy task, and is usually not recommended due to the reasons that follow. One should also recognize that the TOC distribution/replenishment solution works best where S-DBR is fully functional. If this is the chosen option, consulting should be used for the process.
The benefits of using external TOC software over developing an internal solution are the following:
1. Quality assurance—Ensuring that the internally developed software module is doing what it should is very problematic. The good TOC add-on software vendors are investing most of their efforts on checking the validity of the modules.
2. Reliability—Ensuring that now and in the future, no changes or additions are made to the modules (causing negative ramifications) by people who “think they know the philosophy and the environment.”
3. Development—The TOC body of knowledge in distribution/replenishment is currently growing rapidly. TOC consultants and software companies develop new insights continuously, and the TOC software companies invest time and efforts in order to incorporate the latest knowledge into their software. Unless you have a highly skilled TOC expert leading or advising the company continuously and dedicated software designers developing the distribution/replenishment functionality, an internally developed system will never keep up with the developments in the field.
4. Proper know-how—Many fine details are not within the public knowledge domain. When considering companies with special needs, such as seasonal products, limited shelf-life products, fashion products, and groups of similar products or large numbers of buffers, only a TOC software company can incorporate software modules to correspond with those needs without significant investment in time and money to determine how to handle the environment and product characteristics.
5. Long development lead time—Based on our experience trying to help other companies develop and test the logic for distribution/replenishment software modules incorporating the environment and product characteristics, the time needed is significant. It usually takes at least twice the amount of time originally planned to complete the development—usually between six months to two years for full functionality.
6. The Excel problem—While Excel is an excellent tool for many applications, an Excel sheet, despite its relative ease in building and use, is especially not recommended. An Excel sheet is very easy to change. Anyone, including people without the proper knowledge of the distribution/replenishment solution, has the ability to modify it on purpose or by accident, and therefore it cannot really be used in order to enforce the correct use of the distribution/replenishment solution. Additionally, an Excel sheet is very hard to debug. Both quality and reliability are issues in the use of Excel sheets for this application.
Testing the Solution on a Smaller Scale
The TOC distribution/replenishment solution can be tested in two forms prior to implementation. Both forms have advantages and disadvantages.
Simulation
It is possible to do a kind of “simulation” in order to show what results can be achieved prior to implementing the TOC distribution/replenishment solution for a specific environment. In the simulation, the real consumption data and stocking level figures can be simulated and benchmarked against the historical data. This same data can then be used with the TOC distribution/replenishment solution to provide a partial result for comparing