TOCICO

Buffer management is used as a mechanism to ensure high availability at low inventory. The traditional buffer management solution works very well in environments where the norm per SKU at a location is substantial (more than two). This allows for replenishment from the previous link even while there is some stock still available thus eliminating loss of sale. A norm of more than two also presents all three buffer colors (Green-Yellow-Red) from time to time, enabling correct prioritization for BM. It also provides the right signals to correct the norms using DBM. However, there are environments where, for a vast majority of items, the norms per SKU at a location will almost never be more than two….Think of a fashion retail store selling apparel or a retail outlet selling shoes… The store typically has a huge variety of merchandise to cater to its (fickle?) customers. The merchandise comprises various styles, each style in more than one color and each color in a number of sizes e.g. formal, laced, unbuckle leather shoes with shiny toe in colors black, tan and cherry. Each color in sizes 6 through 11. Or consider double weave Polo shirts in five colors with each color in sizes S, M, L, XL and XXL. How many SKUs does this imply?Of course, the range of merchandise (as described above) that the stores hold is different for men, women and kids. A typical store could have 400 styles, each style up to 5 colors and each color up to six sizes. A variety of 12,000 SKUs! How do you ensure near 100% availability of 12,000 SKUs? The rate of sale leads to a norm of one for most SKUs (especially the “exotic” colors, and also typically the sizes S and XXL in the standard colors). The presentation describes modifications needed to operate in such environments.