Analysis Of The New Replenishment Model Of Pull System Essay
The traditional replenishment model may cause either accumulation of inventory or shortage of inventory or even, ‘out of stock’. In order to solve this issue Eliyahu Goldratt proposed the new replenishment model of ‘pull-system’. Establishment of warehouse and integrating a new and appropriate technology may improve the company’s total distribution system. This paper tries to explain my company’s current distribution system and a solution that would help to improve its distribution system efficiency.
In the traditional supply chain system, the manufacturers or the upstream suppliers focus on meeting the customer demand as well as reducing the inventory to the minimum; at the same time customers expect goods to be delivered on time without any defects. The biggest challenge in distribution is to supply/deliver the right product at the place in the right quantity. More often, customers have minimal or zero tolerance towards product unavailability or ‘out of stock’. The possible practical solution is establishing a warehouse to ensure optimal flow of products. The concept called ‘replenishment’, a detailed mechanism of the Theory of Constraints by Eliyahu Goldratt explains the solutions to improve the distribution system in a supply chain. TOC approach in supply chain focuses to reduce the replenishment time.
The objectives of this paper are,
1. To understand the current distribution system in my company
2. To introduce new technology to reduce the lead…