Sunday, November 19, 2017

What's the Difference between a Buffer and a Shock Absorber?

Lately, in industry publications and social networks, you can read a lot about shock absorbers and how to apply them in supply chain planning to reduce variability or absorb it. Apparently, many thought leaders have been replacing and complementing buffers with these shock absorbers… at least in theory. Not wanting to get into anybody’s conversations but I do have my own view on the topic. In my opinion a buffer and a shock absorber are not the same thing and therefore I do not use them interchangeably.

Let me explain my thinking. A buffer is a medium (inventory, capacity, time) that blocks and swallows up a signal... like a firewall prevents heat getting through to the other side. A shock absorber takes the signal in and absorbs it to a certain degree. When the signal is big enough and the absorber‘s buffer is exhausted, there is no holding back anymore.

To use an analogy, think of  driving your car into a pool of mud at 50 miles an hour and you know how a buffer acts. Drive that same car through a pothole 10 inches deep and you get an idea what shock absorbers do… they let you feel what a big change in variability there may be, while a buffer simply stops you right in your tracks.

The problem with buffers is that a part equipped with a buffer doesn’t ‘see’ when a big change in demand is on the horizon. The buffer simply blocks all that’s coming at it. The shock absorber, however, swallows up the little changes but carries through the big ones. That can be very helpful in some situations but annoying and inefficient in others. This is why both buffers and shock absorbers are awesome tools to take the noise out of your supply chain. You just have to use them in the right situation and not mix them up because that can lead to chaos and bad planning.

In the same way one certainly doesn't want to drive a brand new BMW into the mud to slow down when there are a few bumps in the road. But coming down from a mountain pass in a 14 wheeler with failing brakes, you’d be happy if there’s a buffer coming up absorbing all that energy.