Key components of Dynamic Buffer Management:

  • Aggregating variability as far up the supply chain as possible
  • Knowing and measuring the three components of lead-time: order lead-time, manufacture lead-time and transport lead-time
  • Understanding the variation of demand and lead-time
  • Ordering daily and replenishing frequently

Distribution: Dynamic Buffer Management

Imagine decreasing inventories while maintaining or even improving service levels. The proven TOC solution of Dynamic Buffer Management (DBM) does just that. It works by understanding average rates of consumption for a given item, variability in consumption and the different types of lead-time involved in moving the item, from its point of production through to its point of consumption. And, of course, it focuses on then constraint, or weakest link.

Besides dramatically improving service levels, DBM employs the principle of holding and aggregating inventory close to the point of production. This requires a lower investment of working capital, reducing overall inventory costs and freeing up cash.

Applying DBM to your situation

We help you establish an inventory target for each product in a central warehouse. Inventory should be ordered daily and replenished on a regular basis, and inventory targets should be closely monitored according to zones. We also encourage clients to re-examine their make-to-stock and make-to-order policies. We recommend implementing solutions on a significant product line; decisive results should be evident within less than three months.

Although DBM was developed for manufacturing, we’ve used it to manage the ‘bench’ of large consulting firms, where skill types are treated as virtual inventory and demand is aggregated across large numbers of projects.

If all this sounds appealing, get in touch today for a free consultation.