Push Vs Pull System
It is not necessary that a production line be pure push or pure pull. One can design a line so that a segment of the line operates as push and the another segment operates as pull. We present a specific example to illustrate this.
Consider two hypothetical fast food centers, Custom Taco and Quick Taco.
In both the systems raw material (uncooked food and packaging material)
is cooked, assembled and packaged before being sold to the customer. However,
the two systems use a different push/pull interface to achieve different
performance from the system.
The Custom Taco production line is shown in the figure above. The refrigerator
for stocking the raw material is run according to a pull system.
That is, the order for refilling the refrigerator is released when the
level of a particular item reaches its reorder point. Everything beyond
the refrigerator is run according to a push system. That is, food
items are produced in response to customer orders (which represent a schedule)
that determines the release rate for the items. The transition between
the pull system and the push system occurs between the refrigerator and
the cooking stage and therefore represents the push/pull interface
for the system.
In contrast, consider the Quick Taco production line illustrated above. The processes are the same as for the Custom Taco line. However, we have added a warming table after the assembly stage which stores a predetermined level of assembled, but not bagged food items (Assembly puts wrappers on individual items, while packaging puts them into bags to fill orders.) Hence, the line before the warming table operates as a pull system, since releases are triggered by removal of items from stock. Beyond the warming table, the line operates as a push system, since items are moved in response to customer orders.
In terms of system performance, the Custom Taco line is well-suited to a high degree of product variety. Inventory is held in its most generic form (raw material) and hence inventory costs are low. However, this line may not be responsive from a service standpoint, since the customer sees the entire production time as lead time. The Quick Taco line is more responsive, since the customer sees only the time to package and sell the items. However, it has more inventory because items are stocked at the assembled level.
The tradeoff involved in moving the push/pull interface closer to the customer is one of trading higher inventory for faster delivery. The most attractive place to locate the push/pull interface depends on customer expectations as well as costs. Costs are strongly dependent on how rapidly the product proliferates as it traverses the production line. For instance, in a line that produces a single product (e.g., ball point pens), there is little difference between the cost of holding inventory as raw materials or finished goods inventory. Hence, in such a system, it may make sense to put the push/pull interface at finished goods inventory and run the entire system as in make-to-stock mode. On the other hand, in a system where every order is customized after the first step in the process (e.g., a machine shop that does custom prototyping), there is no choice but to hold inventory at the raw material level and run the system in make-to-order mode.
For most lines, where there is some product proliferation, an intermediate
push/pull interface may make sense. For instance, in the Quick Taco
line, the warming table can be placed after assembly because there are
relatively few items (e.g., three taco types and two burrito types).
But placing the warming table after packaging would not be feasible, since
the number of products (i.e., all possible combinations of bags of tacos
and burritos) would be too large. Hence, the cost versus delivery
speed tradeoff is strongly affected by the rate of product proliferation
and therefore the proper placement of the push/pull interface is a highly
individualized decision for a given production system.