Imagine a smooth flowing process. The work is easy, employees are happy and inventory seems to flow like a stream of water. Now, think what would happen if just one operation in the process couldn’t keep up with the others. Or, a machine breaks down. Now your flow is halted and a lot of waiting occurs. Many traditional manufacturers in these cases rely on inventory buffers to prevent a complete line stop and keep lines running. So, what is an inventory buffer?
Buffers are very similar to decoupling points. The main difference is that a buffer as noted in the theory of constraints includes both material and time buffers. In a practical sense a buffer lessens or moderates the impact of something. In the case of inventory management a buffer is extra inventory of either raw material or final product a company maintains as a protection against unforeseen circumstances. Here’s an example. You go into your favorite pizza shop and they have cheese, pepperoni and sausage hot and ready for the customer to grab at a moment's notice. These are a buffer at the end of the line. Many times a buffer is not yet complete and simply awaiting further processing. This allows an organization to have specific hold points where they can use the unfinished goods to level a process or prevent a stop in the line. In simple words, we can say it is the excess inventory that a company keeps in reserves to protect itself against an uncertain future. As noted earlier, buffers can be maintained as material buffers or time buffers. These buffers in both cases are best placed at constraint points or any point in a process where the operation may need a little extra support. These could be shipping points, convergent points or divergent points. Simply put buffers are placed where a process needs help.
What are the advantages and disadvantages of Buffers?
It would be great if there was a set amount that everyone could go off of. But, the reality is that there isn’t. Setting a buffer has its risks but there are a few best practices that you can use to establish your inventory buffer. We will mention them briefly and cover them more in later posts.
Example From Legacy Definition:
When you buff a car you place a thin layer of wax on the paint of the car. This glossy wax helps protect the car's paint and body against elements like wind, weather and changes in environmental conditions. Similarly buffer inventory is meant to help keep productions lines steady when changes in demand occur. Some common examples of buffer inventory are:
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