Page 458 - Orlicky's Material Requirements Planning

436 PART 4 Looking Backward and Forward

■ Replenished parts. Replenished items are strategically chosen parts managed by a
color-coded buffer system for planning and execution. Buffers are calculated by a
combination of globally managed traits relative to the buffer profile into which
the part falls and a few critical individual part attributes. Additionally, these posi-
tions are designed to be dynamic or recalculated within defined intervals. OTOG
over top of green; TOY top of yellow; TOR top of red; and OUT stocked
out. See Chapters 24 and 25 for a discussion on setting the initial buffer and how
the buffer adapts to changes.
■ Replenished override (RO) parts. Replenished override items are strategically cho-
sen parts managed by a color-coded buffer system for planning and execution but
whose buffer and zone levels are defined and static (as opposed to calculated and
dynamic for the replenished parts). RO parts occur when there are defined limits
or dictated levels of inventory within the planning environment. An example
might be spaces in a vending machine; there is a finite amount of space that must
be divided sensibly and in multiples. RO designation can be extremely valuable
in this instance. Without dynamic calculation of the buffer equation, the color-
coding system becomes that much more important for planners to prioritize plan-
ning- and execution-related activity. Figure 26-1 shows a conceptual rendering of
replenished and replenished override buffers.
■ Min-max (MM) parts. The MM designation is for less strategic and/or readily
available stocked parts/stock-keeping units (SKUs). There is still a role for tradi-
tionally defined MM tactics in DDMRP. These tactics are limited, however, to the
types of parts that are managed by those tactics. The APICS Dictionary defines
MM as:
min-max system: A type of order point replenishment system where the “min”
(minimum) is the order point and the “max” (maximum) is the “order up to” inven-
tory level. The order quantity is variable and is the result of the max minus avail-
able and on-order inventory. An order is recommended when the sum of the avail-
able and on-order inventory is at or below the min. 1
Min-max buffers can be dynamically altered or adjusted in the same way as
replenished parts if max and min are calculated as a factor of average daily usage
(ADU). OMAX over maximum; MAX = order up to inventory level; MIN
order point; OUT stocked out. Figure 26-2 shows a conceptual rendering of a
Min-max buffer.
■ Nonbuffered (NB) parts. NB parts/SKUs are not stocked. They are transferred,
made, or purchased to order or actual demand. In most environments, most parts
will fall under this designation.
■ Lead-time-managed (LTM) parts. LTM parts are nonbuffered parts that require spe-
cial attention. These are parts that do not come in sufficient quantity to justify

1 APICS Dictionary, 12th ed. New York: Blackstone, 2008, p. 83.