There’s a long running debate about push versus pull planning in the manufacturing production environment, with push typically exemplified by MRP (material requirements planning) and lean exemplified by pull techniques. A recent article in the Jul/Aug edition of APICS Magazine article (“New-Fashioned MRP”) by Dave Turbide, an APICS certified CFPIM boils it down as follows:
MRP is based on a forecast of expected demand. A forecast is prepared… production and purchasing are scheduled to support demand, and work proceeds. So, you’re pushing forward, to make your product.
In pull, nothing is made until there is demand. Finished goods require a customer order. Replacement materials and sub-assemblies are not bought until existing items have been used. Lean emphasizes making and buying to demand, along with one-piece flow and physical replenishment triggers (kanban).
While some say that push is simply bad, and pull (lean) is good, both approaches, Turbide points out, have their advantages and disadvantages. Push is recommended in fairly high-variety, complex manufacturing and MTO (make to order) situations. Pull works best when demand is high for a “relatively” small range of products. Many companies incorporate elements of both push and pull in their manufacturing environments.
Push is appropriate in conditions of long lead times and a lot of work-in-process inventory. MRP can be difficult to use in these cases, generating multiple exception notices. Required information can be difficult to maintain in these cases. MRP is not demand driven, which is to say, parts and products are acquired to meet a forecast regardless of demand. If – a big if – “the forecast is accurate and the demand actually occurs, then the company can be efficient and profitable. But there is no guarantee…” and any differences between forecast and demand create either shortages or excesses in inventory.
Despite all this, MRP remains “the best tool for handling complexity and it has the flexibility required to deal with a wide product variety. Smart business leaders thus are uniting lean manufacturing tools (kanban, flow production) with their MRP-driven organizations,” notes Turbide.
He goes on to note that some practitioners have taken to using Theory of Constraints to enhance throughput and reduce lead times, and using demand-driven MRP “as a way to pull material replenishment with an MRP-based system.”
As Turbide concludes… “MRP is not dead but traditional techniques are becoming irrelevant as markets shift and evolve. MRP that incorporates the best of the old with the modern, demand-driven extensions is the tool we need today.”
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