Use “Pull” Systems to Avoid Overproduction

The third principle of the Toyota Way is:

Use “Pull” Systems to Avoid Overproduction.

The key concept of a pull system is to maintain small quantities of items that you know are needed, and replenish what is taken only when it has been taken. This helps to avoid overproduction and overordering. You replenish only what has been used, and reorder based on rate of consumption, delivery frequency, and minimum order quantities.

A tool Toyota uses to prevent overproduction is called kanban. A kanban is a sign. It could be well placed card signally that one area is about to run out of parts, or it could be an empty bin, indicating it is ready to be filled again with a specific number of parts. The kanban system is used for managing the flow and production of materials in a just-in-time system.

The Just-in-Time (JIT) system provides customers with what they want, when they want it and in the amount they want it. Material restocking based on consumption minimizes work in process and warehousing of inventory. You only stock small amounts of each product and frequently replenish based on what the customer actually takes away.

Summing-up:The pull-system hinges on the idea of restocking inventory based on the day-to day demand of the customers rather than on a fixed schedule or system. This calls for a flexible system that relies on consumer demand.

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