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04 - Push Pull Strategies

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45 views

04 - Push Pull Strategies

Uploaded by

Diack Tchicaya
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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MiNDS -

Natural
resources
development
and storage

Push Pull Strategies

Carlo RAfele

RESLOG Research Group for


Engineering Systems & Logistics
Impact of forecast overestimation
and underestimation errors

Prediction errors

Over - forecast Under-forecast

Excess stock Risk of lost sales

Higher storage costs Reduced level of


service
Risk of obsolescence Order-expediting
costs
Margins reduction
1
E. Maraschi Corso FOIT 2021 6
Factors determining
real production capacity

Holidays
Production capacity

Scheduled
maintenance,
Theoretical setup Organizational
capacity inefficiencies
Breakdowns
and Quality non‐
downtime conformities,
Unexpected material Real
stock‐out capacity

25

E. Maraschi Corso FOIT 2021


Supply/Inventory Mng
Strategies
Stock management
(look-back forecasts)
PUSH
(Make-to-Stock)
Demand management
Most (look-ahead forecasts)
Production often
hybrid

Firm orders/ Kanban / JIT


PULL
(from customers and/or from
(Make-To-Order)
marketing)
Push vs. Pull

•Push Systems: schedule •Pull Systems: authorize


work work
releases based on releases based on system
demand forecast status
– inherently due-date – inherently rate driven
driven – control WIP level, observe
– control release rate, throughput
observe WIP level
Push vs. Pull
• Definitions
– P Total Production lead time (e.g. Manufacturing
+ transportation + supplying, etc.)
– D delivery time: time from order to shipment (that
the client is available to wait – Demand time)
• If P > D Push/Make-to-stock system
– P – D time requires demand forecast
• If P < D Pull/Make-to-order system

– Pure pull is very rare! Rather mixed approach


is used.
Push vs. Pull
cost

PULL

Hybrid PUSH
volume
Push and Pull Examples

• Are the following systems essentially push


or essentially pull?
– Supermarket (goods on shelves):
- Soda vending machine:
- Doctor’s office:
- Runway during peak periods:
- Order entry server at Amazon.com:
Inventory/Order Interface
• Concept:
– Make-to-stock and make-to-order can be
used in same system.
– Dividing point is called the inventory/order
interface.
– This is sometimes called the push/pull
interface, but since WIP could be limited or
unlimited in both segments, this is not a
strictly accurate term.
• Benefit:
– eliminate entire portion of
cycle time seen by customers
by building to stock.
Example - Custom Food Production
Line
I/O Interface
Make-to-Stock Make-to-Order

Refrigerator Cooking Assembly Packaging Sales

Customer
Example - Quick Food Production
Line
I/O Interface
Make-to-Stock Make-to-Order

Refrigerator Cooking Assembly Packaging Sales

Warming Customer
Table

Notes:
• I/O interface can differ by time of day (or season).
• I/O interface can differ by product.
Different Positions for the
Decoupling Point

PHASES OF THE MANUFACTURING – LOGISTICS SYSTEM Product


Engineering Purchasing SYSTEM Assembling
Manufacturing Delivery

Engineer to Or. Forecasting not required Customized on


demand

Production to O Building
Components
customized on
Forecasting not required demand

Make to Order Aircraft Catalogs


Forecasting about purchased materials
Assembly to O. Furniture Customization
on standard
modules
Car
Make to Stock Mass
Fridge production

Sell to Stock Consumer


Light bulb goods

Source: F.Dallari, Manuale di logistica MPH


Push – Stock Management

Stock management
(look-back forecasts)
PUSH
(Make-to-Stock)
Demand management
Most (look-ahead forecasts)
Production often
hybrid

Firm orders/ Kanban / JIT


PULL
(from customers and/or
(Make-To-Order)
from marketing)
Push - Stock Management

• Demand forecast is estimated based on


past series of data
– Raw material, WIP inventory levels
• Inventory level higher than necessary
– Suitable for low cost parts or whenever
demand planning is hard to enforce in MRP
demand management
• Seeks to avoid out-of-stock situations
Stock Management

time

H = order time
L = delivery lead time
LR= reorder point
Q = order quantity
Push – Demand Management

Stock management
(look-back forecasts)
PUSH
(Make-to-Stock)
Demand management
Most (look-ahead
Production often forecasts)
hybrid

Firm orders/ Kanban / JIT


PULL
(from customers and/or
(Make-To-Order)
from marketing)
Push - Demand Management
• Objective: To determine what, how many and
when components, sub-assemblies, parts, raw
materials etc. are required to put a plan into
operation
– i.e. to ensure that deadlines are respected
– Delivery deadlines are defined out of look-
ahead demand forecast process
– Requirement of components
• directly depend on a plan
– e.g. the master production schedule
• are therefore calculated - and not estimated
– In the end, the objective lies in coordinating the
production dates (rendezvous) of components to
manufacture finished products (or higher level
components in the bill of materials)
Push - Demand Response
• Required information much greater than under
pull systems, as it is needed to know the master
production schedule, the bills of materials and to
consider at the same time all the data referred to
all the products and departments involved

• MRP (Materials Requirement Planning) is the


procedure that implement the data processing
needed to manage inventories

• MRP procedure consists of planning over time


the inventory level (i.e. the availability) of each
item of the bill of materials (finished products,
components, raw materials etc.)
Push – Demand Response

time

H = point in time the order is issued


L = lead time of delivery
Qi = order quantity
Supply Chain Integration – Pull
Strategies

• Is all the chain Pull based ?

https://www.youtube.com/watch?v=JXkMevbjga4
Locating the Push-Pull Boundary

IKEA

Traditional
Furniture Dell Amazon GM retailers

Raw
Customers
material

Production Assembly Manufacturer Distributor Store


components DC DC

PUSH PULL
DC = Distribution Center
Source: Tatjana Bolic ’Supply Chain Management’
Thank you!

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