Friday, November 6, 2009

Pull vs Push: a Discussion of Lean, JIT, Flow, and Traditional MRP Part 1: Tutorial

The lean manufacturing support philosophy has recently received increased interest, potentially allowing it to break like a huge wave across industry. The Enterprise Resource Planning (ERP) systems of the 1990s have been burdened with the liability of carrying on some well-publicized Material Requirements Planning (MRP) problems like complex bills of material (BOMs), inefficient workflows and unnecessary transactions, activities, and data collections. While several years ago prospects were tentatively inquiring about lean capabilities, now they seem to be increasingly requesting them.

Companies such as John Costanza Institute of Technology (JCIT) have been the pioneering source of the philosophies and techniques behind flow manufacturing, which replaces shop-floor silos, such as machines grouped by their function, and traditional scheduling and forecasting with process or product family-based production lines (often referred to as cells) designed to fill orders based on actual daily demand. The idea is to be flexible enough as to keep work-in-progress (WIP) moving smoothly and continuously, eliminating bottlenecks and underutilizing capacity. This particular flow derivative of the lean philosophy was developed and refined by John Costanza, who leveraged what he learned from his exposure to the Toyota Production Model and what he had subsequently applied while working at Hewlett-Packard. He developed specific disciplines and mathematical techniques to implement "demand pull" and "continuous flow" concepts. He named this methodology Demand Flow Technology (DFT), and in 1984, started JCIT, an Englewood, Colorado, (USA) based company, to educate thousands manufacturers ever since.

The term flow manufacturing is closely related to and thus often confused with other demand-driven manufacturing strategies, such as agile, just in time (JIT), and lean manufacturing. They also streamline processes, eliminate waste, use kanban signals to replenish supplies and are subject to continuous improvement. (The Japanese word kanban, according to the APICS Dictionary, loosely translated, means card, billboard, or sign, and the term is often used synonymously for the specific JIT scheduling system developed and used by the Toyota Corporation in Japan. It is a pull system where workstations signal with a card or something similar when parts are to be withdrawn from feeding operations or suppliers.) For more detail on JIT and lean manufacturing and on their impact on ERP, see Trends Affecting Manufacturers and ERP.

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