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Push system and Push system characteristics•A system in which consumer demand is known and expected. As a result a supply chain will preemptively buy materials, manu-facture finished goods, and even deliver them to a store or a picking and packing fa-cility where consumers can buy them at a later date. Inventory is “pushed” toward the consumer in anticipation of consumer de-mand.Pull system and Push system characteristics•A system that is activated by consumer de-mand. As a result a supply chain will not make and store finished goods inventory. In-stead, the supply chain will wait for the con-sumer 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. In-ventory is “pulled” by the consumer by com-municating a specific desire to those in the supply chain.Postponement•A system that combines push and pull - pushing product elements that are consid-ered standard and then allowing customers to pull product elements that can be custom-ized. Those product elements that are stan-dard will be produced in advanced, and thenfinal production will be delayed (postponed) until the consumer places an order that specifies the customized elements.Rocks and Water Analogy•rock represented a different supply chain weakness: poor forecasting, high defect rates, unreliable suppliers, theft, unreliable shippers, etc. In each case more inventory might help hide these weaknesses.•Imagine if instead a company decided to re-move the rock instead of hiding it with more water. In other words, imagine if they fixed the problem instead of hiding it with inven-tory. This is what companies that embrace lean systems try and do everyday.”Lean manufacturing4
SCM 300 – MODULE 06Study Packet•A production philosophy that strives to meet consumer demand and desires but with min-imal inventory levels and minimal supply chain waste.•Ex. TPS(Toyota Production System/ Just- In Time)Keys to lean manufacturing•High Performance Quality •Consistent Quality •Quality at the source – Empowering every employee to be a quality inspector and man-ager•Continuous Improvement - Being lean means being devoted to the consumer. •Poka-yoke – Mistake-proofing. Lean compa-nies will find ways to completely eliminate certain types of errors. •Close supplier ties – Good relationships, trust, and information sharing reduce uncer-tainty and thus will result in fewer unwanted supply chain surprises. •Small lot sizes •Standardized components and work method•Dedication to the Workforce – Lean systemsrequire finding errors, fixing errors, identify-ing opportunities for improvement, and rela-tionship management with supply chain part-ners.”•Using Automation when Appropriate•Short Set-up/Change-over – Set-up time is the amount of time it takes to change a sys-tem from producing one product to produc-ing a different item. Keeping short set-up