Throughput #12
Operating costs too high? Orders slowing down?
You’re not alone. Uncertainty in manufacturing is at an all-time high.
Everyone knows the answer is to become more efficient and more profitable — but the real question is:
Where do you start?
Many jump straight to improving operations management or production planning.
But in our experience, that’s not the first or most effective move.
Here’s what we recommend:
Step 1: Get inventory management under control
The biggest hidden source of chaos? External variability — the constant push and pull between customer demand and supplier performance:
- Customers order in the quantities and at the timing you least prefer.
- Suppliers deliver late, or in order sizes too big for your needs.
This mismatch ties up cash in excess stock, fuels endless firefighting, and still leaves you short when you need product most.
The solution: inventory buffers
An inventory buffer protects your plant from the “whipsaw” effect of unpredictable supply and demand.
Dynamic buffers are set to cover desired customer consumption over your replenishment time.
Best location: at your customer’s site.
Next best: your finished goods warehouse.
Here’s how it works:
- The buffer stays close to its target level as customers consume products.
- No forecasting — you replenish based on actual consumption, not guesswork.
- You produce and ship for your own efficiency, not at the mercy of erratic orders.
The buffer can be smaller than you think because:
- Producing to actual consumption smooths out variability.
- You continuously work to reduce replenishment time using TOC and Lean methods.
Real-world results
We recently helped a client in the branded merchandise space (t-shirts, jackets, hats, etc.) cut inventory by 25%.
This freed up cash that was deployed to purchase a wider assortment of stock, which boosted sales and drove overall profitability.
The payoff
Once inventory stabilizes and chaos is reduced, you can confidently start to improve production planning, execution and other operational areas.
That’s the path to greater efficiency, higher margins, and long-term profitability.
Bottom line: If you want a quick, powerful win in uncertain times, start with inventory buffers — and watch the ripple effect transform your entire operation.
Need help getting started? Give us a call.
TOC Innovation Summit, Oct. 5-8
Join us in Las Vegas for the TOC Innovation Summit, Oct. 5-8.
We invite you to kick off the event with our Goal Simulation Workshop Oct. 5 (1-6 pm).
There’s no better way to experience the impact of Theory of Constraints methods.
This hands-on workshop for manufacturing execs and managers demonstrates how the techniques in The Goal:
- Boost capacity
- Improve delivery
- Cut inventory and costs
- Increase profit
In addition, we will also present a plenary session on How to Make Manufacturing Strong Again. Are you ready for a real productivity impact?
Register for the summit (early bird pricing available until Sept. 5).
Can’t make it to Vegas?
We’re also offering the Goal Simulation Workshop in Kraków, Poland Sept. 29-30. Or book an on-site session for your team – email me to discuss.
— Jack Warchalowski, Montera CEO
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