Raw-material buffers sized to usable stock
A material can be on site and still be unavailable to manufacturing. For a pharmaceutical manufacturer, Opyflow designed a planning model and policy that work from the supplier lead time, testing, release and shelf life of each of 200 raw materials.
To run commercial production, the company needed dependable access to its materials. Sourcing risk varied from item to item, and so did testing requirements and usable shelf life.
Opyflow built a safety-stock and lead-time model at the level of each material, with a planning database behind it. A written policy assigns ownership and sets the review and replenishment rules.
Buffer rules set for 200 raw materials · Testing and release built into replenishment timing · Review ownership and exception rules defined
The challenge
Materials followed different paths into production. Some needed laboratory release or extra preparation after receipt; others had short remaining shelf lives or long, uncertain replenishment times. For these, buying more could add to expiry exposure and still leave in place whatever kept the material unavailable.
Stock held for expected consumption had to be planned apart from stock held against disruption.
Opyflow's work
Each material was modelled on its own terms: how long and how reliably its supplier delivered, what testing and release it needed, any additional processing, how long it kept, and whether an alternative source existed. The model holds a quantity buffer and a separate timing buffer, so replenishment settles how much to hold and also how early the material has to arrive.
Production materials, consumables and laboratory supplies were each handled differently. Where shelf life was short, it put a ceiling on the proposed stock level. Materials with long qualification or release requirements needed their buffers held in a different position and status.
Under the policy, planners have defined responsibilities and replenishment checks for the decisions they make each week, adjustments go to management for review, and periodic updates are required. The policy also makes recommendations on inventory accuracy, expiry monitoring and who owns the material database.
What changed
Proposed stock levels and replenishment timing, previously set by habit or a single rule, can now be traced to each item's supply and release conditions. The policy names who reviews the parameters and who approves exceptions.
Why include release time in the inventory policy?
Until its test result and release decision come through, delivered material cannot be used in production. Replenishment timing has to allow for that wait, and the stock held still has to fit within the material's usable shelf life.
See the capability: Inventory optimisation and safety-stock design →