In the past, production inventory levels were often driven by a fear of running out of material and machines being idle. Today’s factories take a different approach. Using a real-life example, Steven explains the difference between “push” and “pull” strategies and how they impact effective inventory management practices.
- I started in the semiconductor industry many years ago…as a night shift supervisor for a small company in Dallas.…We made memory chips for computer companies like IBM.…Memory chips are a generic product…with no customized features.…So our production plan was based…on a forecast of expected demand rather than actual orders.…So we used what is commonly called a push strategy.…We started a specific amount of inventory each week…and pushed it through the factory,…solving problems along the way.…
One week we were having maintenance problems…with a particular machine.…Each morning at the end of my shift…I would report to my manager that more and more…work in process was stacking up at this machine.…After several days of reporting this problem…I told my manager that we had run out of table space…to store the work at this station.…There simply was no more room to stack the material.…His response?…He told me to go to Walmart and buy another table,…make sure it was cleaned, and put it in the factory.…
That way we could store even more material…
- Describe what takt time is and why it’s used.
- Explain how using standardized parts reduces costs.
- Summarize the importance of quality at the source.
- Cite who should manage lean inventory.
- Describe how to create a lean culture in your business.