ASR and Highly Visible and Collaborative Execution
ASR: Highly Visible and Collaborative Execution
An ASR Recap:
There are 4 major elements to Actively Synchronized Replenishment (ASR):
- Strategic Inventory Positioning – literally, where in the Bill of Material structure, or where in the supply chain, should we hold inventory to provide the maximum benefit to performance?
- Dynamic Buffer Level Profiling – establishing the “profiles” for the Buffer Stock, such that parts with high variability and high volume (for example) will have a different profile than parts with high volume and low variability, or parts with low volume and high variability, etc.
- Pull-based Demand Generation – stock buffer levels are replenished as actual Demand Pull moves Buffers into their Rebuild Zones. Every order generated is assigned a due date, based on a quoted lead time or a cumulative lead time for the part.
-
This page’s focus: Highly Visible and Collaborative Execution – Execution is one of the Achilles heels of the ERP/MRP world; MRP was never intended to be an execution tool.
The ASR Wake Up Call
The more we see Actively Synchronized Replenishment (ASR) in action, the clearer it becomes that manufacturers have been starved of execution tools and support. ERP/MRP has always been a planning system, not an execution system, but the impact of the missing support for effective execution is only just becoming clear.
One of the simplest ways to recognize this is simply to think about how most companies manage Purchase Orders; the key question becomes, when is the order recognized as being late? How vulnerable to disruption does that realization make the plan?
Something we see reinforced every day with every ASR user: the longer the execution horizon, the more necessary good execution support becomes.
And, reinforcing the point made in the section on Pull-Based Demand Generation … due dates are simply not an adequate basis for execution support.
What’s needed are:
- Highly visible projected stock-out alerts … where the projected consumption rate means that stock will run out before the incoming supply will be received.
- Lead time alerts to prompt someone to check on the status of critical non-buffered parts.
- Inventory alerts to highlight stock-outs and projected stock-outs.
And, suppliers need to see this just as much as your own people do.
