Upside production flexibility (UPF)
By Staff -- Manufacturing Business Technology, 1/1/2004 12:00:00 AM
Tracking upside production flexibility (UPF)—a metric within the Supply Chain Council's Supply Chain Operation Reference model, or SCOR—can tell you how responsive your supply chain is to a quantum change in demand.
Specifically, UPF measures the number of days required to increase your manufacturing output by 20 percent and do it on a sustainable basis, says Rick Hoole, a lead director in the supply chain management practice at consulting firm PRTM. "In other words, what can you do without using inventory as a crutch," he says.
According to Hoole, the principal constraint for most companies is the availability of raw materials. It simply takes too long to get an increased flow of goods from their suppliers. "Simply carrying more safety stock doesn't actually do it because it's not sustainable. By definition that's a temporary measure."
Other key constraints include a shortage of skilled labor or a requirement for more equipment, though PRTM surveys indicate these factors aren't as central to the problem as material availability. Solving the problem can be complicated, and best-in-class companies, says Hoole, are working to streamline their supply pipelines and synchronize operations across companies to reduce ramp-up time, cost, and uncertainty.
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