Toyota Way Principle #3: “Pull” Systems

Posted on May 8, 2012 | in Baseball, Basketball, Continuous Flow, Football, Golf, Inventory, Kanban, Lean Tools, Lean Wastes, Overproduction, Small Business, Sports, Transportation | by

(This is the fourth post looking at the 14 lean principles of The Toyota Way.)

The third lean principle of The Toyota Way is a follow-up to the second lean principle, which says to create a process featuring continuous flow so that problems can come to the surface right away.

Continuous flow is very difficult to achieve, especially in environments when job functions change frequently and operators or associates are swapped from task to task. In small businesses, almost everyone has to be a multitasker or wear multiple hats. This is simply the nature of the business, but it’s important to at least investigate opportunities to make continuous flow happen. Continuous flow is really the ideal lean state of a process.

If you can’t implement continuous flow between process steps, move onto the next best thing: a pull/kanban system! Toyota Way Principle #3:

“Use ‘pull’ systems to avoid overproduction.’

The purpose of the pull system (also called “kanban” system) is to have a measured queue of materials (raw materials, work-in-process, components, whatever) ready to be “pulled” by the next process step. After the materials are “pulled” a signal is sent to the preceding process step to replace what was taken.

The most common example of a pull system is your neighborhood supermarket. Shelves are lined with quantities of goods for sale. When you pull a jar of peanut butter off the shelf, a vacant spot remains. At a regular interval (hourly, daily, weekly, whatever is called for in the process) shelves will be checked for quantities of goods removed and purchased and a stockperson will replenish those purchased goods. (Of course, now we have inventory management systems that calculate how many items have been purchased and signal to shelf-stockers how much peanut butter is to be brought out.)

The key concept of a pull system is to maintain small quantities of items that you know are needed, and replenish what is taken only when it has been taken. This helps to avoid overproduction and overordering. You replenish only what has been used, and reorder based on rate of consumption, delivery frequency, and minimum order quantities.

Let’s do a quick pull system example.

Let’s say a concession stand uses an average of one jug of Sweet Baby Ray’s barbecue sauce per game. Sometimes the stand uses more (but not more than two jugs), and sometimes less.

Management might be inclined to keep 3, 5, or even 10 jugs of barbecue sauce in the stand just so they don’t have to rush out and get more 3, 5, or 10 games down the line and they’ll never run out. Well, that takes up 3, 5, or 10 jugs worth of floor space – now there’s clutter with excess materials, and if floor space is at a premium you’re wasting it on items not yet needed.

Instead, consider a system where a labeled rack in the concession stand holds either two jugs or one (with one in the fridge) and replenish the rack (or fridge) daily. You always have only as much as you need, and not excess. If you start the game with two full jugs and use 1.5, put the extra half jug in the fridge and restock the shelf with another full jug. Use up the stuff in the fridge before moving to the next jug.

So how are shelves replenished? Maybe once before and once during the game, have an operator check in-stand inventory of what has been consumed and how much to replenish. Use a reorder checklist of everything in the pull system (including barbecue sauce) with quantities and check off what is needed. Go to a main food inventory holding area (perhaps there’s a collection of racks and refrigerators inside the stadium), remove what is needed to restock the concession stands…and restock the concession stands.

(In this scenario, it helps to have a material handler replenish every item that’s stocked at pre-determined intervals instead of having operators leaving to get items one at a time as they run out.)

That’s the essence of a pull system – having on hand what you expect to need in a given amount of time (for example, one game) and replenishing only what is used.

When you get into calculating the right amounts to stock, you’ll take into consideration minimum reorder quantities, “safety stock”, replenishment frequency, and expiration dates (at the end of a homestand prior to a long series of away games, you may not want to stock perishables that could expire before being used). More on full calculation of pull system metrics later.

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2 Responses to “Toyota Way Principle #3: “Pull” Systems”

  1. Pingback: Management Improvement Blog Carnival #167 » Curious Cat Management Improvement Blog

  2. Pingback: Restocking Points and Gas Tanks | Lean Blitz – Do it better.

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