Push or pull is a key factor in production planning. How do you know which materials need to be available to be able to deliver according to plan? Here’s a little insight into both strategies and the implications for product planning.
Production with a push strategy
One of the biggest challenges in production is to make sure the right materials are available at the right moment. A push strategy makes you look forward: when you have to deliver in a week, accurate forecasting tells you to start producing now. It prevents issues in the future.
Traditionally, many production plans are based upon push systems. MRP (Material Requirements Planning) and ERP (Enterprise Resources Planning) look forward and determine what you need to do now to meet future requirements.
The system worked in the past when plans were scheduled weekly. But as the system grew faster and more accurate, planning could be adjusted hourly – drafting a production plan every hour just wasn’t an option.
Nowadays, push systems suffer from two issues:
- They rely heavily on accurate stock information.
- They lean heavily on forecasts.
Push systems take uncertainty as a given and detailed production plans are made on that premise. On the work floor, these production plans are seen as unreliable and in practice people don’t really follow them. All kinds of margins and extra monitoring are included in the production planning. Gardner research shows that out of all MRP/ERP users, some 80% use Excel concurrently to get the system to work.
Production with a pull strategy
A pull strategy works very differently. You look for signals within the production process that indicate more of a product is needed; you only start to manufacture when there’s a demand for the product. That’s a very LEAN way of working: first demand, then production.
In reality, you are better equipped for changes, as long as they stay within the expected parameters. It’s a self-organizing and self-correcting way to steer your product planning, and obviously the LEANEST way of producing.
Also, you use fixed order units and order sizes. This leads to opportunities for optimization and standardization.
Kanban is an example of a pull signal. A Kanban pull system makes sure you always have stock – but is that always desirable?
Push vs. pull
In short, pull uses a fixed minimum supply, while push uses expected demand. Let’s use a trailer factory as an example, where a specific type of screw is essential for production.
The pull scenario uses two containers of screws. When one container is empty, a new one is ordered. Based on experience, screws are always available to meet production needs.
The push scenario looks at how many trailers were ordered and how many screws are needed at which point in time. Based on future expectations, this leads to an estimation and a subsequent order.
Historically, the push strategy is the most well-known production strategy. However, a lack of overview and constant production planning adjustments also make it the most practical one. The main question is: does it prevent problems in production? And will the need for supply actually be there a week from now? And will the entire production line allow for the new product, or could push production lead to excess stock and process disruption? Push generates a lot of uncertainty.
Pull, on the other hand, allows for more grip. A pull strategy is based on market demand, complemented with optimal alignment of logistic streams and the operational production process. That’s a LEAN method Cierpa fully supports. Unfortunately, current ERP systems do not support pull, which means the production strategy cannot be fully implemented, with all the problems this creates.
The best strategy for your production planning
At Cierpa, we really believe in the LEAN method, or the pull strategy, for any production process. But production systems can’t really work with it yet. In addition, certain companies wish to combine push and pull, making a division between the manufacturing of always-in-demand products and on-demand manufacturing of other products.
That’s why Cierpa Software is developing a LEAN ERP system, called ERPull, combining a traditional MRP/ERP system with Kanban. It allows for the transition from push to pull, whilst also retaining a continuous mix of push and pull. Our software is flexible, so you can manage your production planning the way you want to!
More about custom LEAN ERP
Want to know more about LEAN ERP? Then read our blog. Are you interested in a custom LEAN ERP solution? Cierpa can fully chart your production process and translate it into an efficient production system. Contact us; we like to think with you on the possibilities for your organization!