Page 39 - Orlicky's Material Requirements Planning

20 PART 1 Perspective

An analogy is the dampening strategy used commonly in marinas to protect boats from
damage caused by waves. Marinas will build a breakwall around the moored boats to
protect them. The size of the breakwall directly depends on the expected waves at a given
location.

decoupling: Creating independence between supply and use of material. Commonly
denotes providing inventory between operations so that fluctuations in the production
rate of the supplying operation do not constrain production or use rates of the next
operation. 2
decoupling points: The locations in the product structure or distribution network
where inventory is placed to create independence between processes or entities.
Selection of decoupling points is a strategic decision that determines customer lead
times and inventory investment. 2
The APICS definition of decoupling is descriptive of one form of decoupling.
However, additional decoupling points are now required to compete effectively in today’s
manufacturing environments. This is not to say that all dependencies should be decoupled.
This is further explored in Part 4. These critical dependencies are the places where system
performance will be most affected by cumulative variation. This is covered in Chapter 23,
Strategic Inventory Positioning. These salient decoupling points are essential to under-
standing where to place inventory—the primary question to answer to effectively keep a
company agile while at the same time minimizing working capital considerations.
One form of decoupling is buffering. Only certain critical dependencies should be
buffered. Buffering is the placement of a cushion between two dependencies. There are
three forms of buffering that decouple dependencies and dampen system variation—
time, capacity, and stock.

Time Buffers

According to Shri Shrikanth, a time buffer represents the additional lead time allowed,
beyond the required setup and processing times, for materials to flow between two spec-
ified points in the product flow. 3
Figure 2-6 shows a planned event at a discrete time. This planned event is being
buffered (labeled “Buffered Event”). In front of that planned event, there is a discrete
amount of time that will act as the buffer (labeled “Time Buffer”). The time buffer is deter-
mined by analyzing how much variation is typical preceding the buffered event. The
string of preceding events (labeled “Pre-Buffer Sequence of Events”) experiences cumu-
lative variability that is quantifiable over time. A correct time buffer should be sized in a
way that it will cover enough variation that will reliably result in acceptable service lev-

2 APICS Dictionary, 12th ed. (New York: Blackstone, 2008), p. 34.
3 Mokshagundam (Shri) Shrikanth, “DBR, Buffer Management and VATI Flow Classification,” in Theory of
Constraints Handbook, New York: McGraw-Hill, 2010, Chapter 8.