Lot for Lot: Benefits Associated with Small Quantities

3/11/20 10:30 AM

Many consumers today understand that they do not want a “one size fits all” and seek more a specified and custom design made just for them. Firms and individual consumers ask suppliers for branded packaging and tailor-made services, and they will want it delivered within the timeframe they request. As a result of this, many production facilities find themselves utilizing lot for lot methodology. 

Lot for Lot: Benefits Associated with Small Quantities

Utilizing the lot for lot methodology, also called DOQ (Discrete Order Quantity) can be advantageous to your production and overall supply chain in a variety of ways. With lot for lot,it is a method of lot sizing, where net requirements pertaining to each period are the quantity of order. This method is primarily utilized for expensive items and items where demand occurs intermittently. In such cases, the quantity is the same as that of the case in which a period is specific in fixed period requirements. 

Demand pertaining to a wider range of variants and more personalized products is not limited only to specific sectors. The obvious examples pertain to fashion and high-tech, but there are also other opportunities in various other industries as well, such as chemicals and fast-moving consumer goods. Overall, understanding the capabilities and benefits associated with lot for lot can aid your production process tremendously. 

Reasons to Utilize Lot for Lot in Manufacturing 

Utilizing lot for lot in manufacturing can benefit your operation in the following ways: 

  • Inventory Reduction - Inventory is a problem that many manufacturers constantly seek to solve. With high inventory holding costs associated with manufacturers, production facilities are constantly seeking to reduce holding costs within their operation. Smaller lot sizes ultimately result in less inventory, leading to a reduction in the need for working capital, warehouse spending, warehouse personnel, as well as any costs associated within the warehouse. 
  • Customer Satisfaction/Loyalty - Customer loyalty is key for production facilities. If you have a poor reputation - consumers will sway away from you. This is why ensurement of customer satisfaction is a must for your operation. Meeting customer needs for personalized products quickly ensures that they will be back and that you stay ahead of the competition. 
  • Gaining Traction with Customers - Gaining traction with customers is also another vital component in ensuring that your operation is successful. Reacting swiftly to demand changes and demonstrating to your consumers that you are agile and proactive will ensure that you are the manufacturer of choice. Diversifying your product range as well can greatly aid in development of business opportunities. 

A software that can greatly aid with this concept is PlanetTogether’s Advanced Planning and Scheduling (APS) Software. Advanced Planning and Scheduling (APS) Software allows manufacturers to have thorough visibility into their operation through a visual production scheduling process that locates bottlenecks, errors in production, and more. PlanetTogether’s Advanced Planning and Scheduling (APS) Software is a must for manufacturing operations that are seeking to enhance efficiency and ultimately improve their overall operation as a whole. APS software is ensuring that smaller manufacturers are able to maintain a competitive edge and cut costs, increase profitability, and eliminate waste. 

Advanced Planning and Scheduling Software 

Advanced Planning and Scheduling (APS) software has become a must for modern-day manufacturing operations due to customer demand for increased product mix and fast delivery combined with downward cost pressures. APS can be quickly integrated with a ERP/MRP software to fill gaps where these system lack planning and scheduling flexibility and accuracy. Advanced Planning and Scheduling (APS) helps planners save time while providing greater agility in updating ever-changing priorities, production schedules, and inventory plans.

  • Create optimized schedules balancing production efficiency and delivery performance
  • Maximize output on bottleneck resources to increase revenue
  • Synchronize supply with demand to reduce inventories
  • Provide company-wide visibility to capacity
  • Enable scenario data-driven decision making

Implementation of Advanced Planning and Scheduling (APS) software will take your manufacturing operations to the next level of production efficiency, taking advantage of the operational data you already have in your ERP.

Related Capacity Planning Video

 APS Resources

Topics: lot for lot


Download the APS Shootout Results


PlanetTogether APS: A GPS System for your Supply Chain - See Video

Recent Posts

Posts by Topic

see all
Download Free eBook
Download Free APS Implementation Guide
Download Free ERP Performance Review