Push system and push system characteristics a system

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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 then final 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 manufacturing 4
SCM 300 – MODULE 06 Study 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 systems require 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

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