The traditional view in the service industry is that inventory cannot be stored. For example, you can't store restaurant tables that were empty at noon and add them to your capacity during the dinner rush. However, in this video, Steven describes how the production concept of a push-pull boundary can be applied in the restaurant business to actually store inventory and provide better customer service.
- When most people think of inventory,…they think of a physical product.…Services have inventory also…but it's quite different from factory inventory.…It's a common belief…that service business cannot store inventory.…A restaurant, for example,…would view empty tables as inventory.…In a sense, that's part of their finished product,…a table and wait staff ready to serve a customer.…Empty tables at lunch time…cannot be stored and used as extra capacity…during the dinner hour rush.…
Likewise a barber cannot store his idle time…to trim the hair of additional customers later in the day.…But the view of inventory…in a service business is changing.…I read an article some years ago…by Professor Sunil Chopra from Northwestern University.…Professor Chopra is a world-renowned expert…in operations management,…so people take note of anything he publishes.…His thoughts were that the concept…of a push-pull boundary can be applied to services.…The push-pull boundary is the point…at which a factory switches from pushing production…
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