Exploring Goldratt's TOC-SCRS in Supply Chain Management

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Increasing customer expectations and fluctuations in demand are driving companies search for alternative strategies to operate their supply chains to make more profit now and in the future. Goldratt 's distribution replenishment model is one of such strategies that is being extensively implemented nowadays and gaining popularity throughout world (Belvedere & Grando, 2005). The model is called Theory of Constraints Supply Chain Replenishment System : TOC - SCRS. This is a replenishment method of the TOC Supply Chain Solution (Cole & Jacob, 2002; Goldratt, 1994). In this paper, I would like to give an example of a bakery and dairy products company that manufactures and distributes throughout a supply chain network consisting of Plant, Central …show more content…

What is the solution ??

Figure 2 - The Conflict Cloud

The TOC SCRS solution:

TOC-SCRS replenishment method is based on the TOC supply chain methodology by Eliyahu Goldratt 's TOC theory. TOC is a strategy that helps to focus on critical issues in the system. This model is being applied in wide range of fields such as Supply Chain, Operations, Manufacturing, Finance, Marketing, Sales and Strategy and Tactics (Blackstone, 2001; Kendall, 2006). TOC SCRS method relies on two strategies (Cole & Jacob, 2002) :

1 - Replenishment Time
2 - Buffer Management

TOC-SCRS is in fact, pull based distribution model which emphasizes on the supply side to respond as quickly as possible to the demand in the market without depending on the forecast model. The goal is to replenish more frequently and more quickly.

Key steps in achieving the desired outcome by implementing the TOC SCRS (Cole & Jacob, 2002):

Aggregate as much stock as possible at the upstream level - that is the Plant or Central Warehouse and maintaining high Buffer stock
Replenish as frequently as possible from upstream to downstream, from source to the customer preferably

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