Pulling the distribution in supply chains: simulation and analysis of Dynamic Buffer Management approach

Abstract

Inventory management in supply chains faces several typical problems, such as low turnover, high inventory investments, lost sales due to a stockout of certain items and surpluses of these same items in other locations. In this context, this research aims to evaluate the effectiveness of the Dynamic Buffer Management (DBM) method to protect the availability of products for immediate fulfilment in an environment that adopts the Theory of Constraints (TOC) pull distribution and replenishment solution. DBM algorithms and parameters were modelled and simulated in ProModel software in scenarios whose demand behaviour – here represented by a retail link – has two levels of coefficient of variation. Service level, inventory in the system, and inventory turnover are used as performance measures. The results indicate that disabling DBM and maintaining a reasonable target level in the system inhibit undue adjustments and ensure the best performance in scenarios with demand without trends. However, given the uncertainties about real demand behaviour, the activation of DBM for some treatments allows good results and may help managers to identify changes in the demand pattern.

KEYWORDS:

• Supply chain management
• vendor managed inventory
• forecasting
• make to availability
• pull replenishment
• simplified drum-buffer-rope

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

The author(s) reported there is no funding associated with the work featured in this article.

Notes on contributors

Lucas Martins Ikeziri

Lucas Martins Ikeziri is a PhD student at the Department of Production Engineering in the São Paulo State University (UNESP) and Professor in the Centro Universitário Sagrado Coração – UNISAGRADO. He has a postgraduate degree in Business Logistics from the UNESP and is a bachelor of Mechanical Production Engineering from Paulista University. His research area involves Simulation, Operations Management, Production Planning and Control, Supply Chain Management, and Theory of Constraints, this last area with a publication in the International Journal of Production Research and Journal of Industrial and Production Engineering.

Fernando Bernardi de Souza

Fernando Bernardi de Souza is an Associate Professor at the Production Engineering Department in the UNESP Engineering School at Bauru, São Paulo State University. Fernando has a PhD in Mechanical Engineering from the University of São Paulo (USP). His research focuses on the themes of Production Planning and Control and Supply Chain Management. He is an expert in Theory of Constraints (TOC), with a Certification for Practitioners in the TOC Fundamentals Exam and the TOC Supply Chain Logistics by the TOC International Certification Organization (TOCICO). Fernando uses TOC and Lean Manufacturing intensively in his undergraduate and postgraduate courses and has published in journals including International Journal of Production Research, Management Research Review, International Journal of Services and Operations Management, Journal of Business & Industrial Marketing, International Journal of Managing Projects in Business, and Journal of Industrial and Production Engineering.

Andréia da Silva Meyer

Andréia da Silva Meyer has a degree in Mathematics from Paulista University (1998), a master's degree in Statistics and Agricultural Experimentation from the Luiz de Queiroz College of Agriculture (2002) and a PhD in Agronomy (Statistics and Agronomic Experimentation) from the University of São Paulo (2009). She is currently an assistant professor at the Production Engineering Department in the UNESP. She has experience in the area of Probability and Statistics, with an emphasis on Applied Statistics, working mainly on the following themes: cluster analysis, genetic divergence, and Bayesian inference.

Mahesh C. Gupta

Mahesh Chander Gupta is a professor in the Department of Management, University of Louisville. He obtained his M.Com. from the University of Jammu, India, M. Sc. from the University of Manitoba, Canada, and PhD from the University of Louisville, USA. Dr. Gupta’s areas of expertise and interest include evaluation and improving the organizational performance by using management philosophies (e.g. Just-in-Time, Activity-Based Management, Theory of Constraints, Quality Management, Market Orientation). Dr. Gupta has worked extensively with local companies and published his work in numerous journals including Journal of Operations Management, Decision Sciences Journal, International Journal of Operations and Production Management, International Journal of Production Research, and European Journal of Operational Research, Journal of Operational Research Society, and International of Conflict Management.