Pull system

Definition

A pull system is a production strategy that is driven by actual demand rather than forecasted demand. In this approach, work is only completed when there is a specific request for it, which helps to minimize waste and reduce inventory levels. This system is a fundamental component of the Just-in-Time (JIT) philosophy, where the goal is to produce the right items in the right quantities at the right time.

5 Must Know Facts For Your Next Test

1. Pull systems aim to decrease lead times by producing goods only in response to customer orders, which helps to eliminate excess inventory.
2. This approach contrasts with push systems, where products are made based on forecasts rather than actual demand.
3. The implementation of pull systems can lead to improved product quality since production is closely tied to customer feedback and needs.
4. In a pull system, inventory levels are kept low, which reduces carrying costs and increases cash flow for businesses.
5. Kanban boards are commonly used tools within pull systems to visually track work progress and signal when new production is necessary.

Review Questions

• How does a pull system contribute to minimizing waste in production processes?
  • A pull system minimizes waste by ensuring that production is only initiated when there is actual demand for a product. This approach helps eliminate overproduction, one of the key forms of waste identified in lean manufacturing. By responding directly to customer orders, businesses avoid building up excess inventory that may not sell, thus reducing storage costs and potential spoilage or obsolescence.
• In what ways can implementing a pull system impact inventory management and cash flow for a business?
  • Implementing a pull system can significantly improve inventory management by keeping stock levels low, as products are only produced when demanded. This reduces carrying costs associated with excess inventory and enhances cash flow since funds are not tied up in unsold goods. The direct link between production and customer demand allows for more agile responses to market changes, leading to better resource allocation.
• Evaluate how the integration of a Kanban system supports the effectiveness of a pull system in manufacturing.
  • The integration of a Kanban system supports a pull system by providing a visual representation of workflow and demand signals within the manufacturing process. It facilitates real-time tracking of inventory levels and production status, ensuring that new items are only produced when necessary. This helps maintain the principles of Just-in-Time manufacturing, as Kanban enables teams to quickly adjust to fluctuations in customer demand while minimizing waste and maximizing efficiency.

Related terms

Just-in-Time (JIT): A production strategy that strives to improve a business's return on investment by reducing in-process inventory and associated carrying costs.

Kanban: A visual scheduling system that helps manage work by signaling when new items should be produced or delivered based on current demand.

Lean Manufacturing: A production practice that considers the expenditure of resources in any aspect other than the direct creation of value for the end customer to be wasteful and thus a target for elimination.