As promised, we now have a structure that can be used strategically and quantitatively to determine the most productive operations plan for a business.
That structure involves the following:
1. A value stream/supply chain is composed of demand and transformation.
2. Performance components of transformation are stock and production.
3. Buffers of inventory, capacity, and time are required to synchronize demand and transformation in the presence of variability.
4. Performance boundaries can be determined for stock and production given a mean and variance of replenishment time and demand. ...