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In short, I teach key descision makers how to get a cost-effective and robust production.
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Push-Pull Systems
Background
“Push-Pull” refers to the dynamics between a supplier and a customer. In this discussion, suppliers and customers may be internal – within the organization – or external.
Suppliers “push” products to their customers by marketing; customers “pull” products from suppliers by placing orders.
A “push” strategy may be interactive, as in the case of a telephone call to a customer. It may be non-interactive, in the case of a commercial message through the media. The key point is that a “push” strategy markets finished goods from “warehouses”.
A “pull” strategy waits for and responds to customer demand. This approach, if coupled with sufficiently quick production to meet customer demand, may require no pre-production and no warehoused inventory.
A prime example of a company using mixed – “hybrid” – strategy would be Dell Computer. Raw materials – components – are pre-ordered and warehoused. Despite their marketing “push”, the computer is not assembled until an order is placed – so the production strategy is “pull”. There is a boundary at the start of the assembly process.
Push-Pull Systems in Lean Manufacturing
A goal in lean manufacturing is to use a hybrid push-pull system. This means that:
- Do not build until an order is placed (whether from an external or internal customer)
- Do not store products or raw materials
- Receiving an order for a product triggers orders for its raw materials
- Low cost and high volume products may be pushed; high cost and low volume products may be pulled
- It is important to define boundaries between the push and pull systems
For example: you manufacture three models of a widget. Half the cost of a widget is one component, where each model uses a different but expensive alloy. Every widget also uses some inexpensive, standard fasteners. You likely keep the fasteners in stock, but place orders for the expensive alloy component only when a customer orders it.
Oskar Olofsson, 2009