Theory of Constraints Handbook - James Cox Iii [219]
Harris, F. E. 1916. “What quantity to make at once,” The Library of Factory Management. Vol. V. Operations and Costs. Chicago: A. W. Shaw Company, pp. 47–52.
Sullivan, T. T., Reid, R. A. and Cartier, B. 2007. TOCICO Dictionary. http://www.tocico.org/? page=dictionary.
Recommended Reading
Goldratt, E. M. 2009. The Choice. Great Barrington, MA: North River Press.
Knowledge Base at: www.inherentsimplicity.com.
Schragenheim, E., Dettmer, H. W., and Patterson, J. W. 2009. Supply Chain Management at Warp Speed. Boca Raton, FL: CRC Press.
About the Author
Amir Schragenheim, since 2004, has been the President of Inherent Simplicity Ltd., a software firm specializing in TOC software for Production and Distribution environments. Inherent Simplicity is currently the only software supplier in the areas of production and distribution to Goldratt Consulting, Eli Goldratt’s consulting firm, in their Viable Vision strategic projects.
Mr. Schragenheim holds an MBA from Tel Aviv University magna cum laude, and majored in Marketing and Strategy. He is a TOCICO certified expert in Supply Chain Logistics, Project Management, Finance and Measures and Holistic Business Strategy. Mr. Schragenheim is a regular speaker at both the TOCICO International and Regional Conferences.
Mr. Schragenheim started his professional career with TOC in 1998 when with Eli Schragenheim, he developed computer simulations of production and project management to demonstrate the power of TOC.
CHAPTER 12
Integrated Supply Chain
Beyond MRP—How Actively Synchronized Replenishment (ASR) Will Meet the Current Materials Synchronization Challenge
Chad Smith and Carol Ptak
Introduction
The effectiveness of any system has to be judged by the results that it achieves. In today’s environment, companies and supply chains that struggle with effective materials planning consistently see at least one or a combination of three main business results:
Unacceptable inventory performance. This is identified as having too much of the wrong material, too little of the right material, high obsolescence, or low inventory turns. Companies frequently can identify many of these problems at the same time.
Unacceptable service level performance. Customers continue to put pressure on the company, which quickly exposes poor on-time delivery, low fill rates, and poor customer satisfaction. In addition, customers consistently attempt to drive prices down.
High expedite-related expenses and waste. In an attempt to fix the previous two unacceptable business results, managers will commit to payment premiums and additional freight charges or increase overtime in order to fulfill promises. When the promises are still not fulfilled, then the company is exposed to financial penalties.
The purpose of this chapter is to present an alternative demand-driven approach for planning and controlling material flow and contrast it to the poor business results embedded in most traditional material requirements planning (MRP) systems. This includes a discussion of the core problems causing these results. The concepts and procedures underlying this new planning and control system are based on several Theory of Constraints (TOC) concepts including strategic buffering, replenishment, and Buffer Management (BM).
Copyright © 2010 by Chad Smith and Carol Ptak.
FIGURE 12-1 The current situation for many complex manufacturing environments.
Actively Synchronized Replenishment (ASR) is not dependent on a Drum-Buffer-Rope (DBR) environment, but many DBR implementations will be dependent on ASR. The same is true for Lean environments. ASR is not dependent on Lean, but many Lean implementations will benefit from the implementation of ASR. Both DBR and Lean are