Chapter 7: Queuing Strategies

LPS Objective #3 – Match Supply to Demand

Queuing strategies are sequencing methodologies used to analyze and subsequently match production resources, in terms of capabilities, capacities, and availability to demand requirements of the customer.

Four States of Marketplace Demand

As customers seek sources of supply to meet their demands they may find the marketplace in one of four states:

• Unmet demand – no source of supply exists to meet demand
• Demand exceeding optimal capacity – customers must wait (a lean waste) until capacity becomes available
• Matched demand and supply – demand is met with the optimal combination of resources at the time and place of need
• Excess capacity – idle resources (lean waste) add undue costs to the production and supply chain processes

Queuing strategies support the LPS objective #3 of Matching Supply to Demand.

Selecting the Right Queue

Lean production systems select and manage the queue of work based on the nature of the demand. For example, demand has just occurred how should it be addressed?

• Back of the queue?
• Integrated into the queue?
• Moved to the front of the queue?

Here are some factors to consider:

Customer Impact

• What are the timing requirements of the demand?
• What is the impact of waiting on the customer?

Business Impact

• What impact does timing of demand fulfillment have on customer retention?
• Does meeting demand timing increase the cost of resources?
• Can competitive advantage be gained by matching supply to demand—exactly?

Workflow Impact

• Does the selected queuing strategy negatively impact production flow?
• Are lean wastes created in order fulfillment and production practices?

Queue Designs

Here are four queue designs to consider:

1. First in, First Out (FIFO) Queue. FIFO is designed to support “equal priority” as customer demand occurs
2. Scheduled Queue. Allocate time slots in the production schedule based on estimated lead times. Scheduled queues are allocated based on “equal priority.”
3. Prioritized Queue. Priority varies based on levels of importance of customer demand and estimated lead times. For example, contractual agreements often seek higher priority in the production queue
4. Combination Queue. It is common for production operations to combine FIFO, Scheduled, and Prioritized queue designs. Similarly, they may dedicate production lines to varying types of queues

Rarely does one queue design fit all customer demands experienced by the production operations. Improved customer/product profiling (Chapter 4), demand management practices (Chapter 5), combined with Sales & Operations Planning activities (Chapter 6) aides in the selection of the best queuing strategy to match supply to demand.