ASR, Theory of Constraints, Drum-Buffer-Rope and Replenishment

Actively Synchronized Replenishment provides an advanced application of the TOC Replenishment solution for Distribution and Supply Chain management … but it is unique in also resolving material, parts and component shortages that can ham-string a Theory of Constraints Drum-Buffer-Rope implementation.

While Theory of Constraints is best known through the popularity of the book “The Goal,” by Eli Goldratt, the book contains only a fraction of the TOC body of knowledge; probably less than 5%.

Without question the most popular application of Theory of Constraints is the Production solution illustrated in The Goal, known as Drum-Buffer-Rope or DBR.  DBR is a pull-based approach to scheduling a shop floor and managing the flow of work through the resources that typically provides lower inventories, shorter cycle times, higher productivity and more consistent on-time delivery than the just-in-time techniques of Lean.

However, for many companies the Replenishment-based approach that TOC calls the “Distribution and Supply Chain” solution is a vital application, offering the potential for  extremely high service levels and fill rates of finished goods while providing a basis for substantially reduced inventories throughout the system.

Actively Synchronized Replenishment (ASR)  has direct applicability to both of these.

• ASR provides an advanced implementation of the Replenishment solution, with its Dynamic Buffer Level Profile functionality providing for inventory levels and characteristics of availability that reflect the characteristics (traits) of product groups and individual products, and also dynamically reflecting actual consumption rates.
• But ASR is entirely unique in providing support to resolve a problem that can be a major obstacle to successfully implementing Drum-Buffer-Rope in environments where complex multi-level Bills of Material combine with high levels of volatility and variability in demand and supply. In these environments companies can experience chronic shortages at the material, purchased part and manufactured component level, and these shortages can become the single greatest obstacle to implementing the pull-based Drum-Buffer-Rope scheduling and shop floor control technique.

These combine to offer comprehensive coverage to the Supply Chain – covering the supply side, in house production and the fulfillment aspects of the Operations.

Applying Actively Synchronized Replenishment (ASR) in Production in support of Drum-Buffer-Rope adds some dimensions to the ASR implementation that are unique to theTOC circumstances. For example, the first step in implementing ASR inside an operation is to identify exactly where in the Bill of Material and Routings appropriately sized inventory buffers will offer the most leverage in terms of compressing lead times, eliminating shortages, and supporting high service levels.

This is exactly the same as in support of a Lean implementation.

However, the implementation in support of Drum-Buffer-Rope also offers the opportunity to use the stock buffers to protect the performance of CCR’s, capacity constraint resources, in terms of enuring that they maintain the Drum-beat of the plant as planned; and to protect the performance of any non-constraints where intermittent problems of limited protective capacity due to variability in demand or supply can often be overcome with a judicious stock buffer.