After you create flow, the next Lean step is to establish pull. This is not any more difficult than the other Lean steps but may be the one most understood. Pull will not work unless you have created flow and our working to takt time (takt time sets the pace of production to match the rate of customer demand). Pull simply means that you are responding to customer demands as quickly as possible without creating excess inventory. Simple, right. In fact, Lean has established a system called Kanban to do just that.
Kanban is any signaling device that gives authorization for a supplying process to know what to produce, or for a material handler to know what items to replenish. For example: a physical paper card placed in a container of parts. When stored items are actually used, the Kanban card gets “freed” (perhaps it was in the bottom of the container), and gets put back into a Kanban stand where the Kanban “requests” are fulfilled.
Kanban is a way of limiting work in process and the amount of new work that is introduced into the process. As a result, work would be pulled from the previous stage as work is completed and levels demand. It emphasizes throughput rather than numbers. It can be done through out the entire supply chain. We will use the typical Kanban example of a grocery store:
- Customer buys a box of cereal.
- It is immediately replace by a box that was at the distribution center.
- The manufacturer delivers a box to the distribution center.
- Manufacturing manufactures a box of cereal.
- Vendor delivers the material for a single box.
Of course, the outages are all signaled through the use of a Kanban card. Of course, it is more complicated than this but in theory you may be surprised how closely this does work. There are all types of simulations and Supply Chain methods that are all utilized in an attempt to match customer demand with production utilizing the minimum inventory. Kanban is just one method that is used to provide the link between you and your customer.
One of the best ways to learn and start thinking about Pull is to implement Personal Kanban. For a week, put a board up on your refrigerator or office wall with 3 columns; To Do, Doing , Done. Label your To Do column with how many projects you can work on at a given time – you can start with one. Create sticky notes or a list of all projects needed to be done and place them in the To Do column. Now either have yourself, your spouse or your boss pull a sticky from the To Do to the Doing. When you have it completed, have that person pull the next. This way the most important item is getting done. A true pull scheduling system. One of my favorite podcast on this subject was with Pascal Pinck, A Strategic Collaborator’s use of Personal Kanban. There are several other Personal Kanban podcasts with co-author Jim Benson and others on the Business901 website.
Why do you need to establish a Pull System? The Perfect Storm has come together of Excess Capacity and Product Variety
Carol Ptak, a recent guest on my podcast said…
A lot of people have focused on the fact that the Economic times right now are really bad. What a lot of people are missing is the fact that the world around us has fundamentally changed.
A we see now across the world is that we have excess capacity when you add to that the Internet where we get on the Internet we expect to have an experience like Amazon, or order it is going to tell me instantly when I’m going to get it. If you don’t provide it at the price I want to pay and the time I want to pay then I can just go someplace else. Why can I do that? That’s because I have all this excess capacity out there.
So what companies are seeing today is volatility like they never had to manage before and at the same time they no longer have the reliability of understanding what the customers are going to demand and when they’re going to demand, because customers are increasingly fickle.
So what we’ve got is the perfect storm that has come together of excess capacity and incredible product variety. Think about a new product lifecycles. They’re getting shorter and shorter and shorter. The world we’re trying to live in and started about four or five years ago is that we can no longer afford to build unless someone’s going to buy.
I have to agree with Carol, fundamentally the world has changed and if you are going to wait for the shift back you are in trouble. No longer can we build and build an force our product on others without serious consequences such as price slashing. However, in the long term if our markets have changed and more specifically our delivery methods have changed, we must change. We must establish a true pull system.
Several podcast that might even challenge the thinking of Pull and Lean.
Paul Myers was my guest on a recent Business901 Podcast, Extending Lean Supply Chain Thinking. He recently authored Lean Supply Chain and Logistics Management, a practical guide that will assist you in leveraging your improvements to both vendors and customers. Along the way, you may pick a few other Lean Tips to improve operations in general. I found it an enjoyable read and one that will find little opportunity to gather dust on my bookshelf.
The Business901 podcast, Implementing the TOC Supply Chain featured Amir Schragenheim, President of Inherent Simplicity, a software firm specializing in TOC software for Production & Distribution environments. Inherent Simplicity is the exclusive software supplier for Production & Distribution software to Goldratt Consulting, Eli Goldratt’s consulting firm, in their Viable Vision strategic projects.
There seems to be an element of distaste from Lean Supply Chain people about MRP. Not being a Supply Chain expert it is really not for me to comment. But I did ask Carol Ptak and Chad Smith to address a few of those issues in the Business901 podcast, and in the podcast, Is Orlicky’s MRP relevant today? Think DDMRP. Carol Ptak and Chad Smith were asked to co-author the new Orlicky’s Material Requirements Planning 3/E. Carol and Chad were on previous podcasts with me, In a Supply Chain, Where is more important than How Much! and Can MRP be a Demand – Driven Tool?.
All Business901 Podcast are available at the Business901 iTunes Store or view the Mobile Version of Business901 Podcast
