Section 49. TimeReplenishment Time

49. TimeReplenishment Time

Overview

The Replenishment Time is based around timing from the perspective of a location. It is the time required to receive replacement of an entity after there is an identified need for replacement. Thus, consider yourself as the receiving location itself; Replenishment Time is the time from when you ask to be refilled to when you are actually refilled.

Replenishment Time is counted in actual elapsed days (or hours/minutes depending on the process), not just working days, so a Replenishment Time from Friday across a non-working weekend to the Monday is 3 days not 1.

Replenishment Time typically includes many of the following:

• The need occurs

• The need is recognized

• The request is made

• The request "travels" to supplier

• The supplier processes the request

• The supplier generates replacement entity or retrieves it from storage

• The replacement entity is transported

• The replacement entity is received

• The need is fulfilled

• The need fulfillment is recognized

Replenishment Time is often confused with Process Lead Time. Replenishment Time is purely based from the perspective of the receiving location, whereas Process Lead Time is entity-based and tracks the time as the entity progresses through the process. The two are equivalent only if the entity has to be processed entirely from scratch; thus, to replenish, the entity has to progress the full length of the process.

Logistics

Calculating Replenishment Time requires data collection at the receiving location (typically a Customer site), not from supplying process. Also, given the infrequent nature of replenishment in some processes, data can be in short supply. These two factors can cause great difficulty in getting a usable value for Replenishment Time. To calculate average Replenishment Time, 710 data points are required. Calculating variation in Replenishment Time requires some 2530 data points and might prove to be impossible within the time constraints of a project unless viable historical data is available (which is highly unlikely).

In addition to this, Replenishment Time can vary by entity type, in which case data might be required to stratify by type (i.e., 710 points for each and every entity type). In most cases, however, Replenishment Time is independent of type or can at least be grouped into a few small categories, for example:

• Short term Available to deliver from a finished goods inventory

• Medium term Available to deliver from a responsive process

• Long term Requires special ordering and is not produced on a consistent basis

Thus, Replenishment Time can be calculated for short, medium, or long-term groups of entity types.

Roadmap

Step 1.	Determine the scope of the Replenishment Time, by identifying the beginning point (when the clock starts in the process) and the end point (when the clock stops). This is generally defined as from "when the need is identified" to "when the need is fulfilled." If an earlier point in time is available, such as "when the need arises," then time from that point to the fulfillment point instead.
Step 2.	Data capture can be done in two pieces: At the Customer location, record a unique identifier for the entity and the time of the beginning of the process as defined in Step 1. After the end is reached (the need is fulfilled), then record the end time. The Replenishment Time is the difference in the two times recorded. (Optional, but recommended) At the supplying location it is possible to use a piece of paper that accompanies the entity through the process, known as a "rider" or "traveler." From the point that the request is received, the time is recorded on the rider. As the entity progresses through the replenishment process, capture other key timing points along the process (extra boxes to capture data on the rider), and at the point that the entity leaves the supply location to the Customer location, the stop time is recorded onto the rider. This gives an understanding of the timing of events within the Replenishment Time to understand at a high level where time is lost.
Step 3.	From the captured data, calculate the mean and variation (standard deviation) in Replenishment Times. If the optional data capture was done through the supplying process, then calculate mean durations of steps through the process.

Interpreting the Output

Interpreting the Replenishment Time should not be done in isolation from other elements. The trick is to understand the relationship between the internal times relating to our process:

• Process Lead Time Total time for an entity to progress through the process

• Replenishment Time to Customer Time to fill the Customer's "in-box" when they request it be refilled

• Global Process Cycle Time Rate (expressed in time) at which the process can generate entities

And to understand the relationship with the external Customer or Market related times:

• Requested Delivery Time: how quickly the Customer needs delivery of an entity when they request it

• Takt Time: the pace of usage of entities by the Customer, expressed in time

By looking at the Replenishment Time versus the requested Delivery Lead Time, it becomes apparent whether an entity can be delivered in time to meet an order. If not, and entities are processed from scratch to meet an order, first look to the short-term solution of holding inventory at key points along the process (i.e., make the Replenishment Time less than the Process Lead Time).

For some processes, a Replenishment Time shorter than the Process Lead Time is not possible (every entity must be processed from scratch when an order arrives), and the solution in this case is to shorten the Process Lead Time, by eliminating NVA activity throughout the process.

One subtlety (and often in fact a big opportunity) here is that Replenishment Time is measured from the need occurring, not when the actual request trigger is placed. By mapping the process from need occurring to request trigger placed often some earlier trigger points become apparent, thus extending the effective Delivery Lead Time.