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●Practice lean manufacturing.Push System and its Characteristics●A system in which consumer demand is known and expected. As a result a supply chain will preemptively buy materials, manufacture finished goods, and even deliver them to a store or a picking and packing facility where consumers can buy them at a later date. Inventory is “pushed” toward the consumer in anticipation of consumer demand.●Characteristics (Apple)○High finished goods demand readily available for buyers○Opportunities to take advantage of quantity discounts○End items are standardized with little customization○Vulnerable to obsolescence of inventory, high holding costs, and poor demand forecastsPull Systems and its Characteristics●A system that is activated by consumer demand. As a result a supply chain will not make and store finished goods inventory. Instead, the supply chain will wait for the consumer to place a specific order and only then will the supply chain react by perhaps buying raw materials and/or parts, and then assembling the desired goods, before quickly delivering them to the consumer. Inventory is “pulled” by the consumer by communicating a specificdesire to those in the supply chain.●Characteristics (Dell)○High raw materials inventory readily available to produce a specific customer order○End items offer a wider range of customization options○Vulnerable to increases in demand, poor forecastsPostponement●A system that combines push and pull - pushing product elements that are considered standard and then allowing customers to pull product elements that can be customized. Those product elements that are standard will be
produced in advanced, and then final production will be delayed (postponed) until the consumer places an order that specifies the customized elements.Rocks and Water Analogy●Remove the rocks instead of hiding them by covering them up with waterLean Manufacturing●A production philosophy that strives to meet consumer demand and desires but with minimal inventory levels and minimal supply chain waste.Keys to Lean Manufacturing●High Performance Quality●Consistent Quality●Quality at the Source (routine checks, instead of a final check at the end)●Continuous Improvement●Poka-Yoke (mistake proofing - make it impossible to make a mistake)●Close Supplier Ties●Small Lot Sizes●Standardized Components and Work Methods●Dedication to the Workforce●Use of Automation when Appropriate●Short Setup/Change OverPowerPoint/LecturesSCM Basics●Basic responsibilities of a supply chain○Meet customer demand, contribute to profitability, and continuous improvement●Understand the following terms - front-end, back-end, upstream, downstream○Front End - visible to the customer○Back End - out of sight to the customer○Upstream - in the direction of the supplier○Downstream - in the direction of the consumerPush vs. Pull●