Page 455 - Orlicky's Material Requirements Planning

CHAPTER 25 Dynamic Buffers 433

MANUAL ADJUSTMENTS

Manual adjustments usually are prompted by alerts that are designed to provide visibil-
ity to unplanned changes where the rolling ADU calculation may not react fast enough.
These unplanned changes could include events or trends that are known to one part of
the organization but are not communicated to planning personnel.
One type of alert that could prompt manual adjustments is called an ADU alert. An
ADU alert is designed to warn planners of a serious trajectory change in ADU over a
shorter time frame than the rolling horizon. Both factors of what constitutes serious and
shorter horizon are completely specific to the environment and buffer profile.
The severity will be determined by the ADU alert threshold. An ADU alert threshold
is a defined level of change in ADU that triggers the alert within the ADU alert horizon.
The ADU alert horizon is a defined shorter rolling range within the broader rolling hori-
zon used to calculate ADU. This can be thought of in terms of a statistical process control
run chart that can identify a special cause of variation.
The ADU alert threshold should vary based on the variability codes of a buffer pro-
file. For example, low variability profiles could be set at 25 percent standard deviation
over the ADU alert horizon. Medium variability profiles might be set at 50 percent and
high variability profiles at 75 percent. These percentages and assignments are only exam-
ples. Planning personnel will need to consider their environment and make the appro-
priate setting.
For example, take a part that is subject to a three-month (12-week) roll in order to
calculate ADU. ADU has been hovering around six per day for the last several months.
In this example, the ADU alert horizon has been set up based on a two-week rolling hori-
zon. The alert occurs if ADU is above 12 (double the ADU) over that time. The alert is
intended only to make a planner aware that something critical may have changed. It will
require follow-up. That follow-up may require discussions with several people repre-
senting different functions within the organizations. For example, if the ADU alert on this
part is triggered and the planner follows up with appropriate personnel and learns that
it appears to be an anomaly, no corrective action is required. Conversely, the planner may
discover that marketing has just launched a new Web-based strategy that includes a
direct, easy-to-use online catalogue for service parts ordering. A new ADU may need to
be calculated based on the success of this new program.