Copyright Information   3

This book is dedicated to              4

Preface                5

I am thankful to…             7

Introduction       8

The Vicious Cycle             8

How to reverse the vicious cycle – The Solution9

Characteristics of a Distribution System12

Another Scenario             14

The Problem      16

Replenishment Time      19

The Conflict        21

The Bullwhip Effect         24

What is Bullwhip Effect?               24

Example of the bullwhip effect  24

What contributes to Bullwhip Effect?      25

Shortages and Surpluses              27

Quantifying Impact         29

Shortages, Surpluses and Lost Sales        29

Impact of increase in sales           29

Impact of increase in average sales price               30

Impact of decrease in OE              30

Quantifying Lost Sales    32

Quantifying Surpluses    33

Quantifying the Impact of Reduced Replenishment Time              35

The Challenges36

Batching and its Ramifications    38

Batching at Retail Stores               38

Batching at Central / Regional Distribution Centers           38

Batching at Manufacturing Unit38

Solution               40

Structure and Functioning of Distribution Network           42

Dealing with Forecast     43

Determine Target Level Inventory for Each Product         46

Minimizing Replenishment Time               48

Buffer Zones      51

Buffer Management      54

How to Make the Solution Work?             57

Setting Good Criteria for Variety Decisions           59

Managing Variety            61

What is the impact of the TOC Replenishment System?63

Do the Basic Rules of Manufacturing also apply to Distribution?  65

Improving Flow in a Distribution System                65

Preventing over-production in a Distribution system       66

Taking care of possible negative outcomes of the solution            67

The New Mantras            69

Operational Measurements        70

Advantages of TOC’s Distribution Solution            72

Summary             74

A simple Example            74

Reversing the Vicious Cycle         74

Expected results              75

Self-Assessment Questions        76

eBooks published by Rajeev Athavale    80

Learner’s Guides              80

Article Repository            81

TOC Applications: Implementation Guidance for Small and Medium Size Enterprises        82

Bibliography       83