How to Use a Pull System

A pull system is an inventory system that is often used within lean manufacturing to only produce goods when customer demand is present, reducing waste and extra stock production. Once a customer receives a request, the demand can be facilitated upon order, which means prediction strategies do not need to be used to pre-order or produce stock in advance.

In comparison to a more common push system, a pull system avoids the common occurrence of dealing with excess inventory, avoiding having surplus supply, and facing issues with storage space. This method also cuts out the need for distribution centers; avoiding the need to estimate customer demand which can result in stock shortages or excess stock if a wrong calculation is made. There are so many factors that can create peaks and troughs in demand, so opting for a pull system means an organization only has to produce what is needed, thus saving significant costs which can be put into other areas of the business.

Why Implement a Pull System?

When weighing up the choice between a push system and a pull system, there are various factors to consider and often the best solution is different from business to business. In comparison to a push system, the benefits of a pull system are as follows:

Cut down on waste.

Especially for organizations that produce goods that have a limited lifespan, a pull system ensures each customer only receives orders of the highest quality. Without excess inventory to store, fewer items will have to be disposed of, which cuts out the concern of wasted materials and costs.

Less likelihood of error

By producing stock off the back of a customer order, the chance of error is minimized since the stock is not taken from storage. Without the worry of mistakes such as packing the wrong products, sending expired goods, or not having enough stock to fulfill an order, the risk is significantly lowered which means customer satisfaction rates can be maintained and improved.

Less storage space is needed.

With no need to worry about having a large inventory, storage space becomes a worry of the past and businesses can downsize the amount of space needed for stock. As well as saving space, warehouse efficiency is improved since orders can be processed much quicker without the need for locating the right stock and moving heavy items around.

No need to forecast.

Forecasting errors are an ongoing stress in many organizations, leading to incorrect stock levels that can impact customer orders. Without the need to predetermine how many customers are expected to make orders, the risk of miscalculation is lowered, and every order can be fulfilled individually. By cutting out forecasting, more accurate data can be used to not only run the business but help it improve moving forward.

Improve delivery options.

To speed up the time it takes a customer to receive their order, a pull system requests that an item is shipped directly from the warehouse instead of having to go through a lengthier packing process that includes third parties. This makes for a more efficient service, cutting out frustrating waits so a customer can receive their order on demand.

Less manpower

By cutting out the need to hire staff to fulfill orders and stay on top of deliveries, an organization can keep its workforce smaller to save on ongoing expenses. If demand rises during peak seasons, the option to recruit temporary workers is a more affordable solution which adds the option for flexibility.

Using A Pull System Effectively

To implement an effective pull system, a strong ordering process sets the basis of the methodology. If a customer can make an order directly to the warehouse, the turnaround time is reduced significantly so they can receive the goods in a timely manner. This process means the middleman is removed and the risk of allowing a shopper to order goods that are not in the inventory is removed. To keep this inventory well managed, maintaining an updated product inventory means stock levels remain correct and can be used to accurately fill any incoming orders. If the inventory is kept on top of, a customer will be able to immediately receive their goods, cutting out wasted time.

The physical layout of a warehouse is another area to focus on when establishing a pull system, allowing orders to be fulfilled promptly. The site should be suitable for both small and large orders, making sure to be able to manage any bulk orders made by retailers through delivery routes that are accessible for larger vehicles. 

Even once a pull system has been implemented, it is not likely to work perfectly from the get-go. To ensure maximum efficiency is achieved, the processes should be evaluated and improved on an ongoing basis. Key metrics to keep an eye on include the time it takes for a customer to receive their goods following their order, and analyzing whether the time can be sped up. Any complaints received are also key indicators of a flawed process, giving insights from a customer's point of view which may reflect on the quality of the product they received or the reliability of the ordering process.