Flow, like its other lean manufacturing siblings, differs from traditional manufacturing through a pull vs. a push strategy to move goods. Namely, traditional manufacturing methods rely on the movement of materials through functionally-oriented work centers or production lines, and are designed to maximize efficiencies and lower unit cost by producing products in large lots. Production is planned, scheduled, and managed to meet a combination of actual and forecasted demand, and thus, production orders stemming from the MPS (master production schedule) and MRP planned orders are "pushed" out to the factory floor and in stock. External suppliers also work to support planned production, while materials management often relies on maintaining sufficient inventory, using a make-to-stock (MTS) rather than make-to-order (MTO) or assemble-to-order (ATO) approach.
In traditional manufacturing, the time and cost of changeover to produce different products is high, as are the costs of inventory, planning, and expediting. To recap, in traditional manufacturing, goods are pushed through production at levels determined by often inaccurate scheduling and forecasting tools common in MRP II (material resource planning)/ERP systems. These levels often exceed demand, resulting in building excessive finished inventory, while in a flow/lean/JIT environment orders are pulled through the process, based on actual demand.
By contrast, rather than emphasizing planning like ERP, lean manufacturing and JIT concepts emphasize the continuous improvement of processes that lead to things such as reduced inventory throughout the supply chain, shorter lead times, and faster cycle times enabling improved response to customer demands. Many vendors have consequently bolstered their commitment to lean manufacturing practices with functionality designed to promote rapid response to customer orders based on demand "pull". This includes kanban, mixed-mode manufacturing (i.e., building a new model every day, according to daily demand in order to make several different parts or products in varying lot sizes allowing a factory to produce close to the same mix of products that will be sold that day), and the flexibility to schedule, and manage flow orders for products within product families, with or without using MRP. Again, the idea is for products to arrive exactly when they are needed in the mix and in required quantities to allow production to begin immediately after a customer order is confirmed without having to run MRP or create and release a work order.
Materials are consumed from point-of-use locations or raw-in-process (RIP) locations, whereby both internal and external material suppliers receive replenishment signals at point-of-use locations, RIP, and build or supply materials when location needs to be replenished. These features are attractive at least to existing ERP users and particularly automotive suppliers, who have been pinched by a tightening economy and are under pressure to speed up operations and adopt JIT and lean manufacturing practices. The requirements for the automotive industry, which is particularly conducive to the deployment of lean concepts, are critical even in the accounting arena where evaluated receipt settlement, release accounting, self-billing, and retro-billing speedup processes while helping suppliers optimize their limited resources.
In traditional manufacturing, the time and cost of changeover to produce different products is high, as are the costs of inventory, planning, and expediting. To recap, in traditional manufacturing, goods are pushed through production at levels determined by often inaccurate scheduling and forecasting tools common in MRP II (material resource planning)/ERP systems. These levels often exceed demand, resulting in building excessive finished inventory, while in a flow/lean/JIT environment orders are pulled through the process, based on actual demand.
By contrast, rather than emphasizing planning like ERP, lean manufacturing and JIT concepts emphasize the continuous improvement of processes that lead to things such as reduced inventory throughout the supply chain, shorter lead times, and faster cycle times enabling improved response to customer demands. Many vendors have consequently bolstered their commitment to lean manufacturing practices with functionality designed to promote rapid response to customer orders based on demand "pull". This includes kanban, mixed-mode manufacturing (i.e., building a new model every day, according to daily demand in order to make several different parts or products in varying lot sizes allowing a factory to produce close to the same mix of products that will be sold that day), and the flexibility to schedule, and manage flow orders for products within product families, with or without using MRP. Again, the idea is for products to arrive exactly when they are needed in the mix and in required quantities to allow production to begin immediately after a customer order is confirmed without having to run MRP or create and release a work order.
Materials are consumed from point-of-use locations or raw-in-process (RIP) locations, whereby both internal and external material suppliers receive replenishment signals at point-of-use locations, RIP, and build or supply materials when location needs to be replenished. These features are attractive at least to existing ERP users and particularly automotive suppliers, who have been pinched by a tightening economy and are under pressure to speed up operations and adopt JIT and lean manufacturing practices. The requirements for the automotive industry, which is particularly conducive to the deployment of lean concepts, are critical even in the accounting arena where evaluated receipt settlement, release accounting, self-billing, and retro-billing speedup processes while helping suppliers optimize their limited resources.
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