theory of constraints supply chain management philosophytheory of constraints supply chain management philosophy - - A holistic supply chain philosophy using a pull distribution method that involves setting stock buffer sizes and then monitoring and replenishing inventory within a supply chain based on the actual consumption of the end user, rather than a forecast. Each link in the supply chain holds the maximum expected demand within the average replenishment time, factored by the level of unreliability in replenishment time. Each link generally receives what was shipped or sold, though this amount is adjusted up or down when buffer management detects changes in the demand pattern. Shipments usually are frequent and replenish all items to the appropriate buffer level.
Illustration: In the diagram below, links in the supply chain are represented by ellipses: = links in supply chain Shipping G Y RM FG FG FG ConsumersRProduction buffer Suppliers Central Regional Retailer Whse. Whse. Order processing Production & prerelease lead time lead times
See:distribution or replenishment solution, lean manufacturing management philosophy, lean supply chain management philosophy, theory of constraints manufacturing management philosophy, traditional supply chain management philosophy.