Safety Lead Time Research Articles

Technical note

Safety stocks can be introduced in different ways in production and inventory control systems. The three basic types are physical safety stock, safety lead time, and hedging. Departing from the formula for calculating the number of kanbans, it is shown that all three approaches are implicitly incorporated in the kanban safety mechanism approach. Discusses the ways in which they appear as well as their appropriateness in a just‐in‐time production context.

Adopting Rescheduling Capability in DRP to Deal with Operational Uncertainty in Logistics Systems

Safety stock, safety lead time, and safety capacity are the conventional methods used to deal with operational uncertainty. With the advent of material requirements planning (MRP) systems, the rescheduling capability can be viewed as an alternative to buffer production systems against uncertainty. Logistics systems have characteristics similar to production systems in the face of uncertain events occurred in the operating environments. After presenting the rescheduling capability of a counterpart of MRP in logistics systems, distribution resource planning (DRP), as a viable uncertainty buffering method, we discuss the operational implications of these buffering methods from the perspectives of (1) the nature of the business, (2) the decision‐making hierarchy, (3) the cost of implementation, and (4) the impact of operating environments in logistics systems. The discussion on operational implications should lead to a better understanding regarding how to evaluate these buffering methods in logistics systems.

Research Framework for Investigating the Effectiveness of Dampening Procedures to Cope with MRP System Nervousness

There are several alternatives suggested in the literature to deal with material requirements planning (MRP) system nervousness. Conventional uncertainty buffering techniques, such as safety stock, excess capacity, and safety lead time, can be used to cope with unplanned events and to reduce the impact of system nervousness. However, inappropriate use of safety stock could result in significant work‐in‐process inventory and using safety lead time could distort priorities and increase inventories. Safety capacity is another buffering mechanism which has been used to deal with uncertainty. Dampening procedures to cope with system nervousness have recently received some attention. Here a classification framework is presented which provides a basis for investigating the relative performance of dampening procedures to cope with MRP system nervousness. Operating characteristics are identified and future research directions are suggested.

Managing Uncertainty in Multilevel Manufacturing Systems

The effectiveness of alternative buffering strategies in complex multilevel assembly manufacturing systems using the Material Requirement Planning (MRP) methodology is explored and assessed. The safety stock, safety lead time, “hard” safety capacity, and forecast inflation buffering strategies are tested under uncertainties of end‐item demand, resource supply, and task control. The MRP methodology is applied for scheduling along with a complex, realistic simulation model for execution of operations. Average inventory levels for end and component items, capacity utilisation, end‐item backorders and customer undersupport are used as performance measures. Experimental results establish safety stock and “hard” safety capacity as dominant buffering strategies under all uncertainty conditions, and task control is shown as the most disruptive uncertainty source.

A Cost Adjustment Heuristic for Dynamic Lot-Sizing with Uncertain Demand Timing

We define a new heuristic, based on the adjustment of set-up costs, for the dynamic lot-sizing problem when demand timing is uncertain. Using a range of simulated problems, we compare the performance of this cost adjustment heuristic with that of a safety lead time heuristic, Zangwill's deterministic algorithm, which ignores uncertainty, and the optimal solution. Results show that the safety lead time heuristic works well for problems with high shortage costs and high probability of early demands, but poorly in other circumstances. The cost adjustment heuristic is quite robust, generally exceeds the performance of the safety lead time approach, and is relatively insensitive to variations in uncertainty.

The interchangeability of safety stocks and safety lead time

AbstractDue to the uncertainty in estimating both the demand for end products and the supply of components from lower levels, buffering techniques should be included before the loading of a material requirement planning (MRP) system. Safety stocks and safety lead time are two techniques of providing buffering for loading. There have been many studies made concerning the determination of the amount of safety stocks and safety lead time. Some guidelines for choosing between safety stocks and safety lead time for dealing with uncertainty in both demand and supply also have been established. Although these two different methods have been used successfully, it has not been documented that using these two methods in a given situation will yield essentially the same results; that is, the interchangeability of these two buffering techniques has not been explored quantitatively.Since the net influence of safety stocks and safety lead time and their quantitative interchangeability are of major interest, an analytical model is proposed for this study. The lead‐time offset procedure for components loading are represented by a matrix model that is based on a lot‐for‐lot lot‐sizing technique. This lead‐time offset matrix model is the product of the precedence matrix and the fixed‐duration matrix. The precedence matrix is formed according to the total requirement factor matrix and the duration matrix is formed by each component process time. Thus, the lead‐time offset matrix will generate the starting period of each component.When the lead‐time offset procedure is modeled, the net influence of buffering quantity can be analyzed. The planned safety stock that is normally used to accommodate unexpected demand, shortage in supply, and defects from the operation at each process can be combined with demand to form the master production schedule. The revised lead time due to the integration of the safety stocks can be calculated through the lead‐time offset model. The safety lead time may extend the component process time as well as overall production lead time if the designated safety lead time is longer than the available slack time in a fixed lead‐time loading system.When the proposed lead‐time offset model is further examined, it is found that planned safety stocks at the higher level can buffer the fluctuations of lower level components quantity as well as the fluctuations of same level components quantity. Safety stocks can also buffer shortages that are caused by the delay of raw material and manufacturing processes. Thus, safety stocks can be used to buffer unexpected delay time up to certain limits. A planned safety lead time at higher level component process can buffer the fluctuations of lower level components process time, as well as the same level component process time. The safety lead time can be used to produce additional products to meet unexpected excessive demand up to certain limits under the following conditions: 1. The excessive demand is known before the actual processing of the components in the lowest level. 2. The raw material at the lowest level is available.Although safety stocks and safety lead time are interchangeable in terms of the ability to buffer variations in quantity, the conditions for safety lead time are seldom met in actual practices. Thus, the slack time in a fixed lead‐time loading system cannot be considered as an effective measure to substitute safety stocks. However, all or part of the delay in manufacturing processes or the supply from the lower level components can be buffered by the safety stock and the MPS will still be met. From this study, it is obvious that the slack time can be reduced when safety stocks are planned for an MRP system. The reduction of fixed lead‐time duration will be beneficial to the overall planning and scheduling in MRP systems.