Figure 4: Replenishment Frequency And Constraints
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 …show more content…
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.
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 '