The Theory of Constraints(TOC) has been
implemented by many companies including GM, P&G, AT&T, etc. And it has also been used for the improvement of the bullwhip effect in
their supply chains. However the TOC method is not flawless when apply in a
plant or a central warehouse.
This article finds out a problem when using
the TOC supply chain replenishment system(TOC-SCRS), there will be some
conflicts between the determination of RRT(replenishment frequency and
replenishment lead time) and the replenishment quantity. As shown in Fig.3 , Generally,
the replenishment frequency of a node depends on the public transportation
schedule such as ship schedules etc. or its private conveyor schedule. [1]And
the replenishment lead time is the required transportation time from upstream
node to this node. [1]
The reason why conflicts would happen
between the determination of RRT and the replenishment quantity is because the
replenishment frequency depends on the set up frequency in the plant and the
replenishment lead time depends on the production lead time.[1]
However, the set up frequency and the
replenishment lead time in the plant depend on the production quantity (i.e.,
replenishment quantity). [1]It means that the replenishment frequency and the
replenishment lead time must depend on the known replenishment quantity,
especially under the constraint of limited plant capacity. [1]However, in
TOC-SCRS, the replenishment quantity is determined by the known parameters of
the replenishment frequency and the replenishment lead time. [1]
The article also provides a solution for enhance the disadvantage of TOC in a plant or center warehouse. My question is under which conditions, the TOC can generate best functions?
References:
[1]HH Wu. A study of an enhanced simulation model
for TOC supply chain replenishment system under capacity constraint. Volume 37,
Issue 9, September
2010, Pages 6435–6440
[2] A Guide to Implementing the Theory of
Constraints (TOC).
Jayem warehousing provides both on site and off site warehouse management solutions.All India presence with over 65 warehouses in 25 locations and growing.
ReplyDeleteLargest warehousing company in India