Page 447 - Orlicky's Material Requirements Planning

CHAPTER 25 Dynamic Buffers 425

The answers to all of these questions are also specific to the environment and indi-
vidual planner experience and intuition.

PLANNED ADJUSTMENTS

Buffers also can be manipulated through something called planned adjustments. Planned
adjustments are based on certain strategic, historical, and business intelligence factors. In
demand-driven material requirements planning (DDMRP), these planned adjustments
represent the necessary elements of planning and risk mitigation required to help resolve
the conflict between necessary elements of plan predictability and the use of demand-dri-
ven operational methods.
These planned adjustments are manipulations to the buffer equation that affect
inventory positions by raising or lowering buffer levels and their corresponding zones at
certain points in time. This manipulation occurs through adjusting ADU to a historically
proven or planned position based on an approved business case. Planned adjustments
are used for common situations such as seasonality and product ramp-up and ramp-
down. Product ramp-up and ramp-down are caused by product introduction, product
deletion, and product transitions.

Seasonality
Many companies have challenges with seasonality. Figure 25-2 shows a product that has
a substantial bulge in demand once per year. The ADU (represented by the dark
smoothed line) “flexes” the buffer levels to create that bulge. During peak seasonality,
ADU is more than double that of the low period.
Planned adjustments also must work in concert with the actively synchronized
replenishment lead time (ASRLT) of the part/stock-keeping unit (SKU). This is particular-
ly important with regard to long-lead-time parts/SKUs. Figure 25-3 is an example of a sea-

FIGURE 25-2
Seasonally 1000 100
adjusted buffer. 900 90
800 80
Zone Levels 600 60 Average Daily Usage
70
700
50
500
400
30
300 40
200 20
100 10