Figure 4: Replenishment Frequency And Constraints

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As we can see, the stock quantity is limited at the Retailer level and increases in the upward stream to make sure the Upstream can supply as much as possible quickly depending on the demand. As soon as the product is sold at R, the product is replenished from the RD as quickly as possible. To lessen the transportation time from RD to R, there is another point of supply, called the Wholesaler.

Figure 4 - Pictorial Representation of various Consumption and Supply Points

Replenishment Frequency and Time :

Replenishment Time is the key factor in determining suitable inventory targets. Here Demand and Supply affect the replenishment frequency and time as and when the stock depletes at different consumption points and are the deciding factors
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Because this is a huge network of various supply points and consumption points, as the distribution requires number of hardware software products to be introduced in the system, the existing personnel need to be thoroughly trained and educated before such major strategy is introduced.

Summary

The TOC SCRS approach is based on the Theory of Constraints that focuses on the critical issues of the system and to exploit those constraints. In this example;

Identify the Constraint - The number of consumers who buy the cookies, dairy products and snacks from Retailers and Wholesalers
Exploit the Constraint - Maintain right inventory at the right place at the right time
Subordinate Everything else to the Constraint - The entire system is subordinate to actual customer demand.

Major features of the TOC SCRS approach are :

Replenish - frequently what is sold
Reduce - ordering lead-time
Reduce the inventory in downstream and Retailers to cover for lead time and demand fluctuations
Buffer management is the key
Ship mixed-product shipments
Shift from 'Push ' to 'Pull '

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