Theory of Constraints Handbook - James Cox Iii [231]
Key components of the ASR supply generation process include the following.
Demand Driven
Buffer levels are replenished as actual demand forces buffers into their respective rebuild zones. It is important to note that the buffer level driving demand generation is based on an “available stock” equation (as opposed to on-hand). Available stock is calculated by taking on-hand inventory plus open supply minus demand allocations. Actual on-hand inventory position relative to the buffer zones will provide the execution priority (discussed later in this chapter). Figure 12-7b shows the difference in relative buffer position between available stock and on-hand. The black arrows indicate the on-hand position and the white arrows represent the available stock position. This type of visibility gives relatively clear signals from both a planning and an execution perspective.
For example, part “f576,” according to its available stock position relative to its defined buffer zones, clearly needs additional supply created. Additionally, part “r672” does not need additional supply but rather the existing open supply needs to be considered for expedite.
Decoupled Explosion
Component part requirements are calculated by pegging down through the BOM. However, this planning is decoupled at any buffered component part that is independently managed by an ASR buffer. This prevents the tsunami wave (nervousness) from rippling throughout the company as it does under MRP when a disruption occurs. The decoupled explosion from our earlier example of FPA is shown in Fig. 12-8. Note that whenever a buffer position is encountered, the BOM explosion stops. The figure on the left depicts the explosion for the parent item FPA after its available stock position has been driven into the yellow zone. The middle figure represents buffered children that independently explode when they have reached their respective rebuild zones. Finally, you see the explosion for Sub-Assembly B (SAB) after its available stock equation has been driven into yellow.
FIGURE 12-7b Available stock versus on-hand.
FIGURE 12-8 Decoupled explosion.
Material Synchronization
Component parts with incoming supply orders that are out of synch with demand allocations from parent work orders must be highlighted. This allows the Planners to take actions or make adjustments before work is released to the floor. This reduces the confusion in manufacturing and eliminates a significant amount of expediting.
ASR Lead Time
At the parent item level, MRP understands two types of lead times—neither of which are realistic for most environments. The first is a fixed lead time called manufacturing lead time, which according to the APICS Dictionary (Blackstone, 2008, 78) is “the total time required to manufacture an item, exclusive of lower level purchasing lead time.” (© APICS 2008, used by permission, all rights reserved.) This is the most commonly used lead time definition in most MRP implementations. Believing the assumption that all parts will be available at the time of order release, however, is like sticking your head in the sand. Many MRP systems recognize another type of lead time called cumulative lead time. Cumulative lead time in the APICS Dictionary (Blackstone, 2008, 30) is “the longest planned length of time to accomplish the activity in question. It is found by reviewing the lead time for each bill of material path below the item; whichever path adds up to the greatest amount of time defines cumulative lead time.” (© APICS 2008, used by permission, all rights reserved.)
It is found by reviewing the lead time for each BOM path below the item; whichever path adds up to the greatest amount of time defines cumulative lead time. Most planners understand that the longer the cumulative lead time for the part, the more risk