Dynamic Buffer Management (DBM)

Overview

TOC aims to use very simple straightforward methods in order to be as clear and comprehensible as possible by its users, therefore it avoids using very sophisticated modules of forecasting. The problems in using too sophisticated forecasting modules relate to the complex statistical understanding that is required for their correct use. The logic of TOC suggests dynamic measuring of the actual usage of stocks and readjusting the inventory levels accordingly. This method is referred to by current TOC literature as Dynamic Buffer Management (DBM).

By monitoring the buffer penetration at each stock location for each product, we can identify whether the buffer size that we keep for this product at a specific stock location is about right. The Dynamic Buffer Management (DBM) approach argues that by monitoring and adjusting the buffer sizes we can easily deduce the "Real" stock level value needed at Site to target demand, thus while taking into consideration supply capabilities (how fast can we deliver to the stock location).

The DBM refers to two different occurrences - one in which the buffer size is too large and the other when the buffer size is too small.

Note: DBM operates effectively when consumption behaves normally, we call it "reasonable fluctuation in demand". When demand is not stable but has a pattern that can be forecasted we use the Seasonality complementary mechanism.