No matter what products, services or solutions a business offers, it needs a certain level of buffering to maintain consistent productivity. This buffer can take many different forms depending on the situation, but it’s never free. Buffering is a good business practice when balanced with full lean manufacturing strategy.
Overview: What is level of buffering?
Level of buffering is an excess or surplus within the production cycle. Buffers often take the form of time. If it takes an hour for the paint to dry, then it makes sense to wait a few extra minutes to make up for any errors. However, every extra minute spent waiting is reducing production rate.
Level of buffering can also take the form of physical resources or personnel. Restaurants often need extra workers around in case there’s a spike in customer demand, but that also means paying for over-staffing during the slow times.
3 benefits of level of buffering
Managing the level of buffering is a great way to cut down on non-value-added (NVA) delays in your production cycle and streamline all of your operations.
1. Reducing time waste
One of the ways maintaining a good level of buffering benefits a business is by cutting down on time waste. The cycle time for product or service completion is directly related to the company’s overall capacity and profitability. Buffers absorb anomalies in the workflow, preventing them from causing a snowball effect and wasting time across multiple units, workstations or development stages.
2. Improve operating efficiency
In the same way they reduce time waste, buffers also improve efficiency. The idea is to keep equipment and personnel occupied for as much of their up-time as possible. Anything else is simply wasted resources. Every process has some waste, so it’s all about finding the right places to cut.
3. Opening the door to opportunity
Buffering also positions companies to capitalize on unexpected opportunities. If a manufacturing plant has a particularly efficient day, they can use their surplus supplies to pump the numbers further. This wouldn’t be logistically possible without a surplus on hand.
Why is level of buffering important to understand?
Level of buffering is a sensible precaution that has few downsides as long as its kept in balance. Unfortunately, it’s easy to give into the temptation of being a “hoarder” and allowing the buffer to become oversized, lopsided or even counter-productive.
Balancing the costs
Businesses should always count the costs of every side of their decisions. No matter what you do, there is always the opportunity cost of all the actions you didn’t take. Sometimes, maintaining a buffer ends up costing more than it saves. Companies need to track all these costs so they know when it’s really worth it.
Link to crisis management
It’s also important to understand this concept because of its connection to broader crisis management concerns. Companies need to have strategies in place for both preventative action to address logistical crises in their production process and addressing ones that are already underway.
Don’t be burdened
Buffering is a strategy that should make life easier, not harder. This practice shouldn’t be a financial or psychological burden on a company. If this is the case, it might be worth getting a fresh start on the whole thing.
An industry example of level of buffering
A fast food restaurant serves a conventional menu that includes burgers, fries, chicken and other popular food items. Customers generally expect to order, pay for and receive their food within a few minutes of walking in the door. Asking customers to wait for the entire cooking process on a fresh batch can easily irritate them or even lead to losing the sale altogether.
Even though the business experiences consistent lunch and dinner rushes, daily demand fluctuates at an unpredictable amount. They sell an average of 100 burgers a day over a period of weeks, but some days it’s as low as 50 and others as high as 200. This means the kitchen has to cook an excess of burgers if they want to reduce missed sales and average wait time.
The restaurant needs to know the cost of overproducing versus under-producing. If it costs them $1.00 in production costs to make a burger and they sell them for $4.00 each, then missing a single sale is essentially a loss of $3.00. However, wasting the burger means a loss of $1.00 from the production investment. That’s why the level of buffering must balance priorities between minimizing lost sales without producing excess daily waste.
3 best practices when thinking about level of buffering
There are a few different perspectives that can shed light on any discussion about buffering practices.
1. Prioritize critical processes
Don’t get distracted by details at the expense of moneymakers. Businesses need to selectively identify critical processes and make those the first priority when buffering.
2. Consider redeployment alternatives
Sometimes, maintaining a surplus isn’t the only way to address waste and opportunity loss. In some production environments, personnel and equipment can be readily redeployed to address inconsistencies or demands elsewhere in the facility.
3. Calculate relative cost
Always calculate relative cost so you know when it’s not worth buffering anymore. Think about the cost of wasted products as well as the logistical challenges of storing and disposing of them. All of these factors matter.
Frequently Asked Questions (FAQ) about level of buffering]
What is a buffer in business management?
Buffers are all about breathing room. Bumpers on a car are a buffer that prevents serious frame damage during minor accidents. Keeping several grill lighters on hand in case one goes out is a type of buffer. In business management, a buffer is any kind of financial, logistical or physical surplus that mitigates service disruption.
Are buffers always necessary?
Buffers are a calculated decision just like everything else in management. They are almost always a good idea, especially in high-volume or fast-paced production environments, but they are not strictly necessary.
How do I calculate a good level of buffering?
It’s easy to get caught up in the complexity of the calculations and neglect the simple approach. Leaders should leverage their own knowledge, experience from workers and even get some outside perspective from consultants to develop a formula for buffering their processes.
Buffers are a living thing that should flow alongside changes in the workplace, whether it’s shifting market trends or new production processes. For lean manufacturing and six sigma practitioners, this is a concept you need to truly grasp if you want to master key management concepts.