Modern supply chains are expected to respond rapidly, effectively and ef?ciently to changes in the marketplace. Simultaneously there is the drive to achieve world-class customer service levels coupled with minimum reasonable inventory (MRI). We thus have the classic con?ict of interests between marketing, production and materials management. Marketing wants the complete product range available off-the-shelf; production is still, all too often, looking to manufacture in economic batch quantities so as to achieve economies of scale; and materials management is trying to minimize storage and distribution costs which, in turn, require that a total systems MRI policy be adopted. Time compression at all stages in the chain is seen as the way to respond to these challenges.
The ground rules for effective supply chain design were coincidentally established in 1961, when Forrester showed that medium-period demand ampli?cation was a system dynamics phenomenon which could be tackled by reducing and eliminating delays and the proper design of feedback loops. In the same year, via his "?ve rules to avoid bankruptcy" directed at smoothing material ?ow, Burbidge showed that short-period demand ampli?cation was due to multiphased, multiperiod ordering policies. We con?rm that, on the basis of industrial studies, collapsing cycle times drive the business into a more competitive scenario. This means that time compression strategies based on model simulation may be used con?dently to predict improvements in supply chain performance.
Journal article Towill, D. R. (1996) 'Time compression and supply chain management: a guided tour', Supply Chain Management,1 pp. 15-27.
Question:
The journal article discusses approaches to achieving time compression in the supply chain and how similar are those approaches to the application of lean principles to elimination of waste through channeling value stream flows?