W3-D2: Push and pull program

Syed Zaidi Push and Pull program MBA 6012 Operations and Supply Management February 14, 2012 Cliff Butler

W3-D2: Push and pull program Abstract

The purpose of this study is to discuss push and pull type manufacturing and to discuss about Material Requirements Planning (MRP) in context of push and pull type manufacturing.

W3-D2: Push and pull program Introduction In manufacturing final products several raw materials are required which may be

assembled or processed to produce the final product. Based on manufacturing according to demand supply chain management of these raw materials can either be push based or pull based. Push based and pull based programs In push based manufacturing the production is not based on actual demand, products are manufactured in line with forecasts and estimates. This type of manufacturing is also known as Make to Stock manufacturing as the firm first manufactures a certain quantity of product and than tries to sell it in to the market whereas in pull type manufacturing the production is based on actual demand and the product is manufactured when order to manufacture is received. This type of manufacturing is also known as pull based manufacturing. In pull type manufacturing inventory costs are low and inventory level is kept as low as possible. Models such as Just in time (JIT) production and Continuous replenishment program (CRP) are examples of pull type manufacturing. Materials Requirements Planning According to Jae K. Shim and Joel G. Siegel (1999) Material requirements planning(MRP) is a flow-control system design to ensure that parts and components (item with dependent demand) are available in the period when they are needed, with little or non present at other times (p.306). MRP first breaks the final product into its components parts i.e. raw materials used in it, this process is called explosion than it calculates the material requirement for manufacturing of a final product based on forecasts and produces the report for purchases of materials to be made this process is known as netting. It is a push based program as it produces material requirements reports based on forecasts which is a make to stock model rather than on

W3-D2: Push and pull program actual demands. An example of pull based program is JIT where raw materials are managed according to actual demands. Conclusion Modern manufacturing is looking forward to shift from push based to pull based manufacturing to reduce their inventory costs through programs developed like JIT. MRP is still used in some industries like airlines, bus travel etc as there actual demand cannot be predicted.

W3-D2: Push and pull program

References Shim, Jae K., & Siegel, Joel G. (1999). Operations Management.

New York, NY: Barrons Publishing Push-Pull manufacturing. Lean-manufacturing-japan.com. Retrieved from http://www.lean-manufacturing-japan.com/scm-terminology/push-pull-manufacturing.html