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Showing content with the highest reputation on 10/03/2017 in all areas

  1. To start with, it has been proven that pull system works well in many scenarios. It also leads to savings, less inventory etc.. However, it cannot be implemented everywhere. In todays world the customer expects to be served immediately - the one who is able to satisfy the demand at that moment is the one who gets the business and in turn the money. Take the case of a normal person who needs some medicine. Can the manufacturer then work on getting one set of pills only for this customer made and shipped - is this feasible? or doable? currently, we have seen an outbreak of influenza / dengue etc - in such cases - the demand exists and is known - to a large extent can be forecasted to some degree of accuracy and the end product is needed at a particular point in time. It would not help if the end user has to wait for the product to be manufactured and delivered. Take the case of vegetables of fruits that are being produced - here too, the demand is to some extent forecastable to some degree of accuracy and have a longer lead time - they cannot be produced in the pull methodology. Take another case of diamonds - these are generally not produced for one person at a time - they are mined, cut and kept ready in the hope of finding a buyer Overall, the thought is that where the demand for the product is to some extent forecastable, where the lead time is high and the demand needs to be fulfilled immediately, pull system may not work. The supporting ecosystem (eg: the supermarket which supplies the vegetables and fruits / the drugstore which sells the drug etc) may use the pull system, but the product will be manufactured / grown and kept ready for sale even before the customer has demanded it..
  2. Some of the situations in which the "Push" system is generally successful would be one or more of the following. No two situations are the same, even if some appear similar. 1 Demand is easily and accurately predictable Due to an accurate forecasting system, the risk of carrying “dead” inventory is less. Moreover, by planning and pushing a steady volume to the market, supply chain and production are also steadied, thereby eliminating delay losses. 2 Conversion costs between products is low due to late point differentiation If in spite of an accurate forecasting system, there is a difference in the final product type demanded, the stock of Product A can be converted to Product B at a very low cost and pushed on to the market. 3 Very short time demanded from order to delivery If a very short delivery time or instant delivery from the point of time an order is placed is demanded by the market or customer, there is no option except to supply from stock and avoid revenue losses due to short supplies. 4 Products do not deteriorate during storage When there is no constraint on “shelf life”, the risk of inventory to be written off is low. Further more, inventory is being used up sooner rather than later, reducing cost of delays. 5 Carrying cost is less than cost of lost business When a manufacturer is able to make up for the expense of carrying inventory by exploiting the predictable demand, the likelihood of profiting, “net-net” is high when compared with the potential loss of business, customers and reputation by becoming Just-Short-Of-Time rather than Just-In-Time 6 Long, geographically global supply chains with their own unpredictability Even with the best e-Kanban-powered pull system, the long winding, supply chain that traverses the entire globe is so packed with potential “delay-bombs”, that some “good-old” stock, which can be pushed becomes the life-saver 7 Shipping costs can be optimised by shipping in bulk When the costs of transporting raw material or components or sub-assemblies can be whittled down to almost next to nothing by using up (say) full container space, stocking up and pushing is not a bad idea 8 Demand profiles across time periods are static When there is no fluctuations between days of a week, weeks of a month and months of an year, it is profitable to stabilise production and supply chains by planning and pushing an average volume periodically to the market
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