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Wednesday, July 25, 2012

Advantages of Push-Pull Boundary

Push, or build to stock 
- Advantage: lower lead time
- Disadvantage: higher inventory

Pull, or build to order:
- Advantage: lower inventory
- Disadvantage: higher lead time

Having a push-pull boundary is a hybrid approach. Operations prior to the boundary are pushing and operations after it are pulling.
- Advantage: Can trade lower lead times for lower inventory by moving boundary closer to last operation. Or vice versa.

Note that each component part in a product can have a different push-pull boundary.
- Manufacturing parts with expensive raw materials and/or high labor costs should be pulling more than pushing, to reduce cash tied up in inventory
- Manufacturing parts with long lead raw materials should be pushing more than pulling, so supplier's lead time doesn't affect your lead time to your customers.

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