Pull-through production definition
/What is Pull-Through Production?
Pull-through production is a just-in-time manufacturing method that releases a production order into the manufacturing process when a customer order is received. Sufficient resources are assigned to the manufacturing process only at the point when the production order is released.
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Advantages of Pull-Through Production
There are several advantages associated with a pull-through production system. They are as follows:
Reduces inventory investment. This approach minimizes any excess investment in inventory, since it should result in very little raw materials or finished goods inventory.
Reduces overhead costs. Since there is less inventory on hand, it also means that warehouse space can be minimized, which reduces factory overhead costs.
Enhances customer loyalty. A further advantage is that the immediate nature of these orders allows a business to offer some degree of customization to customers, which may increase their loyalty to the seller.
No obsolescence. There is no inventory obsolescence, since the manufacturer maintains no finished goods inventory.
Disadvantages of Pull-Through Production
The primary downside of pull-through production is that job lots may be as small as a single unit. This may require more overhead to set up equipment within the production process, as well as to place orders for small amounts of raw materials.