The Pull Principle: What It Is & How It Can Benefit Your Business
In lean manufacturing, the Pull Principle is an important element of the 5 core lean principles. In this guide, we’ll show you what it is and how and when to use it.
What is the lean principle? It’s a lean manufacturing technique that allows you to control work in progress. Pull can often be linked to making only only what’s been consumed. This means that the waste of inventory and over production is massively reduced, as you only process based on what has just been taken or consumed.
The Problem with ‘Push’
In a normal ‘push production environment’, work is often created to a schedule. A schedule comes normally from an MRP or ERP system, whereby it predicts what should be made and when based on anticipated and actual orders.
This information is passed on to every other process. Each step then works to their own work-to list.
Building to a forecast results in a number of things:
- No-one can see into the future accurately. Not even a bit of computer software. And the further you ask it to look out, the less the accuracy is.
- If you’re building to your plan and customers change their mind, you’re left with a whole lot of wasted time, backlogs of work and over produced product that you can’t shift.
- There are generally large and uncontrolled batches of work-in-progress throughout the business
The above traditional points of view, ensure that you’re often busy producing a lot of inventory… and often the wrong things.
This takes up vital workspace and also the time it takes to process.
One Common Pull Principle: The Paradigm Shift
In a pull system, work in progress is controlled.
Kanban is sometimes commonly used to help drive pull principles. In this system, work gets produced only when it’s been consumed and there’s a trigger to tell the previous steps to make more of what’s just been taken.
This requires there to be a holding area of controlled stock – the essential ingredient of the pull principle. This holding area has just enough stock to keep the processes in front of it going and to provide the customer with what they want, without over producing and out of control inventory levels.
Product is taken from this area, and then replenished by the previous process, when that processes receives instruction to do so.
The place where these parts are held is called a Supermarket.
The pull principle brings about a complete mindset shift. The responsibility is placed on the operators to make only when there is a trigger to make.
This means that schedules and forecasts are tossed aside and replaced by good old simple visual management. Operators produce what’s been consumed from the holding stock, kept in the supermarket.
If the customer does not consume a certain product, then it is not produced by the supplier… Even if the forecast tells them to produce it.
The pull principle transfers responsibility to the shopfloor to make what needs to be made, not what people or systems think should be made.
And from this simple visual pull system, operators know exactly what should be made, how much and when.
What’s a Supermarket?
A supermarket is the place where components or product from the previous process are stored, to supply the next process (or customer).
The supermarket is not a dumping ground.
It’s a controlled area where only a certain amount of inventory is stored to ensure that production can keep moving, and the customer receives what they want, when they want it.
It’s controlled in the sense that there’s a lot of thought and analysis that goes on behind the scenes to ensure the optimum amount of work-in-progress needed.
It’s similar to what you find in a supermarket, hence the name!
And like the supermarket store….
- Best selling items exist in higher quantities and are positioned in the best places (easiest to find)
- Items that don’t sell as much, exist in lower quantities and are positioned in less optimised positions (You’ll have to do a little more searching)
- Sporadic items are not found in supermarkets – if it’s not sold, it’s not shelved
This ensures that parts and product are calculated and stored so the customer always finds what they need AND the supplier is capable of replenishing these parts in time, so they don’t run out.
It’s why there’s room for more than one bottle of coke on a supermarket shelf. Chances are, they shift faster and are a high frequency selling product.
Which Items Should be in a Supermarket?
As we’ve defined, not everything goes in a supermarket.
The simple answer is as follows:
- Identify items of high frequency and high volume
- Identify items of high frequency and low volume
By defining what items you churn and which you don’t you can control those that pass through the business regularly.
This means that you shouldn’t have to plan and schedule these items. They just happen like clockwork.
Here are some examples of supermarkets:
When do we Need Pull Principle Supermarkets?
There are a number of scenarios when we need supermarkets and pull principles.
When we can’t continuously flow. There’s a saying in lean: “When you can’t flow, pull.” This means that if you can flow and process products continuously, then you don’t need kanban. Kanban is used to limit inventory when there are specific hand-offs between cells and other processes, whereby work has to wait its turn.
Hence, continuously flowing one at a time is then not possible.
When demand varies over short periods of time. To ensure that customers can still receeve their products amidst vast spikes in demand, a supermarket is a great option.
Having a supermarket allows you to supply what the customer wants in a quick lead time, without having to massively plan for spikes. All you need is enough stock to cover these periods, and let the supermarket hold these stock levels in a controlled manner.
When production batches are bigger than consumption batches. There may be times where it’s just not feasible to process in the same batch sizes across the facility.
This is normally the case when it’s efficient to produce in larger batches on some processes. However, the next receiving process may not need these large number units, and can process to demand.
In this case, batches can be made to service the supermarket and keep it topped up to the agreed levels. This is still controlled, using triggers when to make and how much each time.
At the same time, the next process takes what it needs, based on customer consumption. Much like the barrel example above, when the stock gets down to a certain level, a larger run is initiated at the supplying process to top up.
When the response time to the customer is too long. Sometimes you need to service your customer faster than the lead time that your end-to-end processes can provide.
In this case, it makes sense to hold a supermarket where customers get exactly what they want in the time they want it, and which allows enough time for your processes to replenish.
When there is a shared resource that supplies multiple products. In this case, the shared resource can ‘pulse’ through many different product families in a standard way, working to the supermarket consumption triggers.
This ensures that the shared resource only produces what’s been taken, and to a standard routine. For instance, it may cycle through every hour, making A products, then B, then C, then D, respectively. Andy only if there are triggers for each product family.
When the cycle is complete, it resets and repeats from A again. At any time, if there are no triggers, it moves onto the next family that has a trigger… and then keeps repeating. This ensures that all lines are kept running whilst processing only what’s needed next.
What is push and pull in supply chain? The same pull principle applies to companies that supply your products – your suppliers. Often, companies try to predict orders into the future and then, using Minimum Order Quantities, order excessive amounts of stock.
In a pull supply chain, companies agree holding that is minimised and then place orders when stock has been consumed. The idea is to order higher frequency and lower levels of stock, rather than lower frequency and higher levels.
If done correctly, the savings in working capital can be drastic, as well as space and reduced time stock counting. Better customer – supplier relationships are a by-product of this approach, because you’re working in closer partnership, as opposed to just placing orders willy-nilly.
What are push and pull strategy advantages and disadvantages?
In push, some some expected advantages are:
- Lots of available inventory – Reducing the chances of running out of stock
- Allows you to look into the future and plan for demand (no matter how inefficient this really is..:))
The disadvantages of push are:
- Large quantities of scrap can be generated before anyone finds them – the more inventory the more chances of missing errors
- A lot of work has to go into stock take and ensuring stock is bought or processed, based on planning and duplicated effort
- Excessive space is needed to house larger stock and work in progress
- Despite all this planning, products may get overlooked and may still miss customer delivery
- Working capital is tied up in excessive stock
- Lack of flexibility in deliveries to customers
- It’s harder to scale for growth, as your costs disproportionately grow every time you increase sales.
In Pull Principles, the advantages are:
- There’s limited inventory and work in progress
- More agile operations and customer centric processes
- It’s easier to see defects and correct issues
- Better cashflow to support operations
- Less space and time needed to plan, produce and store product
- Stock is always controlled and systemised
There are some disadvantages, however:
- Systems must be in place and followed, otherwise it won’t work
- Set-up times and process changeovers must be fast to ensure agile responses
- Problems need to be fixed fast (as per the lean way), otherwise you could get unhappy customers