Pulling versus Pushing

Expert David Kiger stressed the importance of becoming proficient in lean production systems. Moreover, he has talked about the current and ongoing trends concerning logistics and supply chain, and also about the philosophies that have made possible its understanding and future application. On the same issue, all these theories, philosophies, and trends aim at eliminating excess — whether it is wastes, costs, inventory, etc. — and overproduction, which is highly advisable to start getting acquainted with the basic principles entailed in lead production processes and systems.

Lean production systems can be addressed, or, better, conceived in two different ways: a lean pull system and a puss lean system. One of the key elements in lean production systems can be found within the concept that suggests the idea of the pull versus de-push production system. The whole concept behind pull refers to the idea that a company wants to start its process — or do things quickly for this matter — as quickly as possible once customers have cashed for them, but never any sooner than that. Doing so will result inexorably in a dramatic cut in costs and an accelerated production process. Nevertheless, as in any system, in lean production systems, there are some stages that commonly slow down the internal processes; and the pull system substantially focuses on mitigating, and in the end also reducing, overproduction and the excess of stock. These two aspects are essentially the ones responsible for absorbing huge amounts of money and time.

By having a look at the typical manufacturing process: the one where items are produced to be stocked somewhere, unlike, for example, Toyota, that produces its cars based upon demand, like this avoiding having many cars in production, which results in having a lesser inventory time. So, when companies decide to rather push things, and they make stock pretending that that is somewhat of a good thing, hoping that, maybe, the sales department will eventually save them by selling all of it, what is really happening is that companies are actually creating a lot of slack, which causes an increase in the costs commonly inherent to the production process itself in terms of managing such amount of inventory: slack kind of acts like a disruptive element since raw materials end up stranded on one side and the unsold produced goods stranded on the other side, with the work in process in between. So it would be fair to affirm that the push approach is a rather disruptive element within the ideal lean production system and the supply chain itself.

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Courtesy of Lee at Flickr.com

The above is enough for experts to constantly suggest that the most advisable thing is to switch towards a pull system: once the customers order something, there is when the company ought to start production —hence the “pull” concept — and thusly pulling all this chain of activities in the right direction, however, readers might always bear in mind that none of this should happen unless the customer has already requested a product or service. Of course there are some variables that cannot be controlled and events that cannot be foreseen, hence the necessity and importance that companies produce a certain amount of stock just to keep up with the standard status of the current and ongoing demand; nevertheless, by assessing the demand and identifying the factors that suggest the stock quantity that companies ought to produce without falling into the trap of filling their warehouses with inventory, they can by all means achieve a shorter inventory time and a lesser inventory in terms of quantity. This will not only save the company money but also will save it time and effort.

Establishing the ideal manufacturing pull signals are to be clearly defined depending upon the economic sector to which a given company belongs. In general, pull signals come from actions that are a consequence of the commercial activity, for example, an automotive company could say that, if someone buys one of their cars, then that would be a pull signal since it would trigger the process of re-stocking or re-producing another car. Pull signals can also come from customer calls: if the customer service department is actively receiving inquiries or calls from customers asking for help, then it would be a pull signal too. Imagine the retail market, what would the pull signals be? Well, every time customers take something from a supermarket shelf, or buy something at the market, that would be pull signals: it would force the re-stocking at many different levels, whether at managerial levels and need of more office supplies or production levels or logistics and transportation levels, etc.; that would be a trigger to replenish that stock and keep it at a certain level based on how the demand has been behaving.

Re-orienting a business towards pull signals instead of constantly producing stock will result in a much better and more controllable supply chain environment, avoiding the excess of inventory, the excess of waste and inefficient costs.

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