Create a Pull system
The system of production and service that we have all grown up with is that of “batch and queue” and of “push”. Think of it, car makers make as many cars as possible with their big efficient(!) batch mass production machines. They fill parking lots and forecourts with cars and then try to sell them. When they don’t sell them, they discount. If you go in to a car showroom wanting a blue car, if they have a lot of green cars to sell they will try to persuade you that green is nice too! Their method of transferring value is to “push” it at their customer.
With Lean Thinking, you should let the customer “pull” value. If the customer does not pull, then do nothing. Wait, you think, do nothing. That’s crazy. Why? If the customer doesn’t want anything yet, why are you wasting resources guessing what they might want, producing it anyway and then having to shift it at a discount.
Perhaps it is different in services. Not much. All the things we want seemed to be pushed. Insurance, mortgages, pensions are often pre-packaged and pre-built, just like a car. If I want to fly to New York, I have to fly when the airline flies, not when I want to. They push special interest rates and seats on planes.
In order to make a whole system pull, each part has to pull from the previous part. So nothing happens until a customer buys. Think of a supermarket. A customer pulls a cola tin from a shelf (thanks to Womack and Jones and their book “Lean Thinking” for the structure of this) that can is replenished from the warehouse out back, the warehouse is replenished from the regional distribution centre and that centre from the distributor of the cola tin. After the cola distributor has moved that tin he needs another tin and more cola to replace the one he just shifted, so he asks the mix company and the tin company to send more, who in turn need sugar and water etc. and aluminium and steel all the way back to the mining company and the sugar beet farmer. In the case of the cola tin the “pull” system is not perfect, in fact there is still a lot of batch and queue, but they are getting better.
The key is that each step only produces when the next step needs it to.
Remember, before you can have pull you need flow and an idea of where value is in your value stream. Why? Because if you don’t flow and your value stream is full of waste, then you won’t be able to pull fast enough for your customer. Until you can, you will be better off with an inventory so you can respond quickly enough. That is definitely only a temporary measure though.
In future blogs I will talk of kanban systems and ways of implementing pull, but I just wanted to implant the seed.