What are Time Fences?

Definition and Core Purpose

In Integrated Business Planning (IBP) and Integrated Tactical Planning (ITP), a Time Fence is a policy guideline that marks a specific boundary in the planning schedule. It defines the point in time where the rules for changing supply, demand, or production shift from automated flexibility to manual restriction.

The primary purpose of time fences is to stabilize the schedule and prevent "system nervousness", disruptive changes driven by computer logic without human oversight. They function on the financial principle that as plans get closer to the present day (execution), the cost and disruption of making changes increase exponentially.

Time fences fundamentally manage Decision Rights: determining whether a change can be made by system logic, a human planner, or requires executive escalation.

The Two Primary Time Fences

Planning systems typically utilize two distinct fences to manage supply and demand:

1. The Planning Time Fence (PTF) This is the most critical fence in Integrated Tactical Planning (ITP). It is usually set to cover the Cumulative Lead Time (CLT), the total time required to procure materials and manufacture the finished good.

• Inside the PTF: The ERP/MRP system is restricted from automatically rescheduling or adding orders. It provides exception messages, but a human Master Scheduler must manually approve any change.

• Outside the PTF: The system is free to automatically rebalance supply and demand based on lead times and lot sizes.

2. The Demand Time Fence (DTF) This fence manages how the demand signal is calculated.

• Inside the DTF: The forecast is ignored. Total demand is calculated solely based on actual booked orders to prevent building inventory for sales that have not materialized.

• Outside the DTF: Total demand is a combination of actual orders and statistical forecast.

Operational Zones and Flexibility

Time fences divide the horizon into three distinct behavioral zones:

• The Emergency Zone (Frozen): The period closest to "today" (e.g., 1–2 weeks). Assets are fully committed. No changes should be made here without executive escalation, as they incur high costs like overtime or premium freight.

• The Trading Zone (Slushy): The period between the Emergency Zone and the PTF. Capacity is committed, but priorities can be "traded" (e.g., swapping SKU slots) if materials are available. This zone is managed manually by the ITP Quorum.

• The Liquid Zone (Open): The period beyond the PTF. This zone is flexible, and the system automates changes to align with long-term strategy.

About SIMCEL

SIMCEL unites your planning processes into one seamless platform. Whether you're optimizing inventory in Supply, refining forecasts in Demand, aligning financial strategy in Finance, or driving sustainability in Carbon—SIMCEL empowers your team to simulate, visualize, and align every decision across the business. Say goodbye to silos and hello to truly integrated, agile planning.