Why PULL Works
The first step in pull-based replenishment is to align capacities with strategically placed inventories. This has the effect of greatly reducing lead-times and total global inventories. The second step is to size inventory at each location to the pattern of demand and supply. This right-sizes inventory to meet all sales while waiting for replenishments to arrive. The third step is to pull quantities by frequently ordering replenishments for only what was sold or consumed. This correctly aggregates quantities and automatically causes everyone in the supply chain including the manufacturing capacities to focus on what is actually selling. Gone are the wastes of over-production, expedites, overtime, and added distribution activities. The fourth step is to monitor and adjust inventory levels for larger changes in customer demand or supplier reliability based on actual performance. The old way of continuously predicting is gone, leaving people more time to focus on exceptions and planning product launches and closeouts.
PULL Is Tailored for Each Organization
Pull-based replenishment has been implemented in a broad range of industries from consumer products to heavy manufacturing, repair and overhaul, reverse logistics, military, etc. It is a process-based solution and leverages existing investments in software and people. Adapting pull into your operations follows a known process to identify and tailor for your industry, organizational, and product differences. The end result is a custom fit map of changes including details of who and how people will execute each step.
The Benefits are Significant
Those implementing pull-based replenishment are reporting significant permanent gains such as:
- Reduced inventory
- Increased sales
- Reduced costs in transportation and warehousing
- Decreased expedites and overtime
- Freed capacity
- Less effort to manage