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Pull Vs Push Vs Grab

One of the fundamental elements of lean is to create pull in the system, so what does that mean? Well lets first agree what we mean when we talk about push systems and the challenges that they create and about what the heck grab is!  

A Push System 

Most of the time when you hear people talking about push systems, they are describing make to stock systems. No matter what happens in terms of sales your system will still make 100 red widgets once your stock on hand gets to a set lower limit, irrespective of you actually having any further orders for them from customers.

It's actually a bit of a simplistic and incorrect definition. Certainly if you are working like this then you are certainly pushing stock into a system that probably doesn't need it right now but the true definition is really that in a push system you essentially aren't limiting the WIP in the system at any point, you are just making nonstop, cramming things in, typically to keep those really expensive machines busy because, well, you paid lots for the machine so they need to be busy to get the payback. (this is actually based on accounting practices from the time of Henry Ford!!)

With a push system, you tie up resources: people, equipment, raw materials and of course cash in things that you hope you can sell. Quality issues are generally found towards the end and put to the side and fixed as a batch. What's worse your accounting system sees this stock as assets rather than liabilities. 

What the heck is Grab 

Grab is a bit of a tongue in cheek thing I talk about, think about it as push after it's had 6 espresso coffees. This is where you are just dragging things in to keep people or machines busy all the time no matter what. Typically, there will be at least 4 or 5 or more options of what could be worked on just in case something goes wrong with the job in front, so material, resources plans are crammed and hoarded just to ensure that there is work to be produced. This has the effect of dragging other departments into this chaos, planning constantly must replan, design needs to rush to get designs out, purchasing needs to purchase lots more to provide just in case coverage. Its expensive and exhausting and will drive up your costs.

A Pull System 

In a pull system WIP is limited, the system can only produce when a signal, typically by way of a Kanban, says make something. The 1st trigger is tied to the end customer, so they would arrive and buy a box of 20 red widgets. That sends a signal back down the process to make only the 20 widgets that were purchased. The machines in this system may have a WIP limit of three which means there can only be 3 items waiting at each machine (ideally you want a batch size of 1, that's' nirvana). In addition quality defects are not passed to the next machine, you stop and fix the issue.

The effect of this is that there will be times that your people and machines may not be making red widgets. This does tend to unnerve people and can take getting used to. The upside of this is that you can use this time to do a number of things: Make something else, blue widgets for example which happen to sell for more, maintain your machines, train your people and everything in between. It also means that your money isn't tied up in inventory, it's available as cash on hand for investment, it means that your raw material is in its most flexible form, so when you need to be building blue widgets you can or you can build red or green.

The pace at which material move through a pull system is quicker since you have improved flow and limits on the amount of work in progress there are less hold ups, you have flow.

Summary 

So, there you have it, push systems are all about jamming as much into the system as you can and hope that someone will come along and buy what you have made. A Pull system, however, is all about consciously limiting the WIP that you have at all steps in the process and tends to use Kanbans as a method of managing this although ERP systems do it as well.

Moving from a Push system to a Pull system isn't a quick or simple thing and there needs to be a few steps before you do it but the benefits of a pull system are huge, less stock, less WIP, faster throughput, more flexible performance and improved cash flow. Which one sounds a better business decision to you?


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Sunday, 17 February 2019

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