5.4.

BUFFER FLEXIBILITY 71

5.4 Buffer Flexibility

In practice, buffering variability often involves more than selecting a mix of buffer
types (inventory, capacity, time). The nature of the buffers can also be influenced
through management policy. A particularly important aspect of buffers is the extent
to which they are flexible. Flexibility allows buffers to “float” to cover variability
in different places (e.g., at different jobs, different processes, or different flows).
Because this makes the buffers more effective at variability reduction, we can state
the following principle:

Principle (Buffer Flexibility): Flexibility reduces the amount of buffering re-

quired in a production or supply chain system.

To make the concept of buffer flexibility concrete, consider the following specific
examples:

1. Flexible Inventory: is stock that can be used to satisfy more than one type of
demand. One example of such inventory is the undyed sweaters produced by
clothing maker Benetton, which could be “dyed-to-order” to fill demand for
any color sweater. Another example is the supply of spare parts maintained
at a central distribution center by Bell & Howell to meet repair requirements
at sites all over the United States. In either case, less generic stock (undyed
sweaters or centralized parts) is required to achieve the same service achieved
with specialized stock (dyed sweaters or localized parts).

2. Flexible Capacity: is capacity that can be shifted from one process to another.
A common example of this is an operator who has been cross-trained to per-
form multiple tasks so that he/she can float to stations where work is piling
up. Another example is a flexible manufacturing system (FMS), which can
switch quickly from producing one product to another. The ability to work
on multiple processes means that flexible capacity can be more highly utilized
than fixed capacity, and therefore achieve a given level of performance with
less total capacity.

3. Flexible Time: is time that can be allocated to more than a single entity. For
example, a production system that quotes fixed lead times to customers (e.g.,
all deliveries are promised within 10 weeks of ordering) is making use of a fixed
time buffer. However, a system that quotes dynamic lead times (e.g., based
on work backlog at the time of an order) is using a flexible time buffer. In the
flexible case, weeks of lead time can be shifted between customers, so that a
customer who places an order during a slack period will receive a short lead
time quote, while one that places an order during a busy period will receive a
longer quote. Because dynamic lead times direct time to customers where it
is needed most, the system with flexible lead times will be able to achieve the
same level of customer service as the system with fixed lead times, but with a
shorter average lead time.