How ASR offers major benefits for Supply Chain Management

Actively Synchronized Replenishment ASR) creates a remarkably effective supply chain through highly visible and collaborative execution capability.

Most ERP and/or MRP systems offer limited visibility to the real priorities associated with a full queue of Purchase Orders, Transfer Orders and Manufacturing Orders throughout the supply chain.

Without this visibility, the supply chain (suppliers, manufacturing, fulfillment and customers) employ the usual default mechanism of priority by due date which results in lots of reactive expediting.

Any sort of visibility or specific answer often necessitates a manual workaround or subsystem which requires massive daily efforts of analysis and adjustments.

So – what’s wrong with priority by due date?

Priority by due dates does not convey real priorities within the execution horizon.

Since priorities are not static, they react to the actual market pulls within the lead time of your Purchase Orders and Manufacturing Orders; this is called the execution horizon.  The longer the execution horizon, the more volatile the changes are to priority and the more susceptible a company is to adverse material synchronization issues.

Ask yourself the following questions:

• How does the manufacturing floor really know the priority of stock orders?
  • Do you ever have MOs to fulfill stock that have the same due date (either a discreet date or “DUE NOW)?”  How does the manufacturing floor decide what the priority is?
  • Do you ever have MOs to fulfill stock orders that have different due dates?  Is it conceivable that despite a MO being due later, it is actually a higher priority?
• How does the supplier know how to align their capacity to your priorities?
  • Do you ever have several open POs to a supplier all with the same due date?  If yes, how do they know which is the most important to apply efforts to?
  • Do you ever have several open POs to a supplier with different due dates?  Is it conceivable that despite a PO being due later, it is actually a higher priority?

How does ASR solve the problem?

Visible Buffer Status

ASR allows actual order priorities (POs, TOs or MOs) to be effectively conveyed without additional efforts, disconnected subsystems or other workarounds.

Color coding gives an easy to understand general reference.

The percentage of buffer remaining gives a specific discrete reference.  These references convey today’s real priority regardless of due date.

Suppliers and manufacturers need to see this every day.

Lead Time Managed (LTM) Parts

What about parts that are not stocked but instead are critical long lead time parts?

 

Many critical components simply don’t make sense to stock due to their relatively low volume.  These long lead time components can be very difficult to manage especially if they are remotely sourced.  Without an effective way to manage these parts we risk major synchronization problems, costly expediting or poor service level performance. 

 

In ERP/MRP systems there is very little done about the management of these parts.  They are managed by due date with no formal system of visibility and proactive management to reflect real priorities.

ASR gives special status and visibility to these parts. 

These LTM parts are tracked and at a defined point in the part’s lead time buyers are prompted for follow up.  If resolution is not made  the warning continues to get more critical.  Resolution could be either the assignment of a follow up date (temporary resolution) or the assignment of final confirmed date and decision (could be sooner, on time or later).

Both the visible buffer status and lead time managed parts are supported by a strong front office interface involving text notes, calendar updates/exports and the ability to launch e-mails that are part AND order specific.

The key is to increase the amount of accurate and timely information available to the entire chain.

This highly visible and collaborative execution capability creates a remarkable effective supply chain that can respond to real market demand without manual workarounds and other disconnected subsystems.

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