Based on the characteristics of the Drum-Buffer-Rope (DBR) concept, guidelines for supply chain management can also be formulated.
First of all, unlike “lean management,” there is a noted need to maintain certain inventories within the system, as well as capacities (e.g., production), rejecting the need for local optimization (e.g., productivity or the utilization rate of a given workstation) in favor of the efficiency of the entire system. These inventories and spare capacities protect against uncertainty resulting from demand volatility, as well as unexpected downtime within the supply chain. As a result, the system’s flexibility increases and its reliability improves. Secondly, the presented concept can be used to indicate where to maintain inventories within the supply chain. It is worth noting here clearly that the DBR concept does not at all advocate “cluttering” the supply chain with safety stocks. It assumes maintaining inventories near the bottleneck, while in other areas of the supply chain, it assumes a coordinated and uninterrupted flow of materials. Thirdly, DBR provides a good indication of where to locate so-called decoupling points in the supply chain; they should be located precisely within the bottleneck, above which reactive material flow control should be used, while below this point, a proactive approach should be applied.
In addition to direct guidelines for supply chain management, the theory of constraints also provides a good basis for developing new management concepts for these complex systems. An example is 3C – a theory of material flow management in supply chains, which, according to its creators, is an alternative to MRP II class systems. Within 3C, the supply chain is treated as a set of links (called consumption points) that are interconnected. The primary function of consumption points is to make goods available to other consumption points in the chain (or eventually to the end recipient) when they are needed. There are two basic types of consumption points:
1) storage points – links where there are inventories of goods available immediately for subsequent links in the chain (for end customers)
2) ordering points – links where there are no inventories of goods, and therefore they must be ordered and/or processed according to the recipient’s requirements, which involves so-called lead time.
According to 3C, when optimizing the supply chain, one should start by restructuring the weakest link – the consumption point. Improving other links will not bring positive results and may even lead to a deterioration of the performance parameters of the entire system (this is the basic postulate of the theory of constraints!). 3C is an acronym for three elements that make up the presented theory: capacity (capacity of consumption points), commonality (universality of materials), consumption (consumption of individual links).
Their sequential implementation within the supply chain should be considered a process of material flow optimization.
The article comes from the magazine “Logistyka” 1/2006.