Push-pull is also known as lean inventory strategy. It demands a more accurate sales forecast and adjusts inventory levels based on the actual sale of goods.
A pull system is set up to respond directly to internal or external customer demand. For example, a production facility begins to replenish the orders based on customer demand.
A pull system experiences increased customer satisfaction as products are manufactured specifically to fulfill their requests. Since products are made in small quantities, quality issues will be identified faster than with the push system. This system also experiences less inventory as products are not made until they are needed.
Kanban is the most well-known approach for implementing a pull system. The Kanban card system provides a sign or signal by the next step in the process or downstream operation.
The hot delicious beverage production process does not commence until an order is received from a customer. So the customer generates a signal when they purchase a cup of coffee, effectively pulling materials through the coffee-making system, thus called a pull system.
The purpose of implementing a pull system is to build products based on actual demand and not on forecasts. Just because you have spare capacity at any given point in the system does not mean you should produce more. In the end, this leads to excess inventory, which is just another form of waste.
The pull system is also called a JIT system because it operates Just-In-Time to deliver finished goods, materials, or WIP when needed instead of just accumulating inventory.
Now, onto the next half of the Push-Pull system.
Push: A manufacturing system in which production is based on a projected production plan and where information flows from management to the market in the same direction in which the materials flow. This is how many traditional production and project management environments have worked. This is effectively the opposite of how a pull system works.
A pull system is a lean manufacturing strategy used to reduce waste in the production process. A correctly managed pull system can eliminate multiple kinds of waste.
Excellent summary of a pull system, thank you
Very welcome, Dave. Thank you for the warm comments!