by HKPO Lean Six Sigma Experts, a Shingo Licensed Affiliate

Flow and pull are at the heart of the Toyota Production System, incorporating the entire supply chain from the vendor’s vendor to the customer’s customer. The focus is on creating value for all, including customers, marketing, production and operations, logistics, vendors, etc. Toyota measures the time from when the order for raw materials is placed until the money is in their pocket from the end sale. They consider the reduction of that time as the measure of increased value. Another similar measure is to evaluate the total cash-to-cash cycle time as the ultimate definition of success and value. This clock starts when the money for raw materials is outlaid and ends when the customer pays for the product received. Some companies, like Dell and Walmart, have mastered this in some of their product lines to where they receive payment from the customer before they pay their vendor for the materials sold.

To improve flow and pull, it is critical to study the entire value stream and eliminate waste in all the steps within the process. Value for customers is maximized when it is created in response to real demand and a continuous and uninterrupted flow. Although one-piece flow is the ideal, often demand is distorted between and within organizations. Waste is anything that disrupts the continuous flow of value.

Dr. Shingo’s book on “non-stock production” stresses one-piece flow and is referred to as the Shingo Production System. Understanding the material in this book is critical if the reader is interested in a deeper understanding of this concept. Tools that facilitate the Shingo Guiding Principle Improve Flow & Pull include standard work, VSM, SMED, poka-yoke, kanban, and 5S.

“In pull production, all processes should be arranged so that the work-piece flows through the workstations in the order in which the processes take place. … Once the line is formed, the next step is to start a one-piece flow, allowing only one piece at a time to flow from process to process. This shortens lead time and makes it difficult for the line to build up inventory between processes.”

A pull production system requires that all problems – quality, machine breakdowns, etc., – are addressed before the process can restart. As such, a line with good flow quickly forces the identification and resolution of problems.

An example of flow and pull can be found in the NUMMI GM-Toyota experiment where the two companies attempted to learn from each other. NUMMI adopted the pull production systems in place in other Toyota plants. These production systems are often referred to as just-in-time (JIT) and kanban.

“The just-in-time (JIT) inventory system is designed to produce only what is being ordered or sold rather than to produce for inventory that will be used to absorb ups and downs in demand. Lowered (or eliminated) inventories of incoming, in-process, and finished goods saves space and costs of money tied up. It also:
• results in quicker identification of problems arising due to defective inputs or processing problems.
• results in increased emphasis on avoiding breakdowns (and thus on preventive maintenance); and
• provides additional pressure to make production processes more flexible (such as being able to produce more types and styles of vehicles on one assembly line (as is done at NUMMI).”

The philosophy behind the principle Improve Flow & Pull is to drive inventory as low as possible in all areas. But if inventory is required because of competitive on seasonal sourcing requirements, keep inventory at as low a level possible. At Toyota, they say, “Flour is more flexible than bread,” meaning that bread will always be bread, but flour can be turned into any variety of end products.

To reiterate, value for customers is maximized when it is created in response to real demand and a continuous and uninterrupted flow. Although one-piece flow is the ideal, often demand is distorted between and within organizations. Waste is anything that disrupts the continuous flow of value. Ultimately, the fundamental truth behind this guiding principle is that eliminating obstacles maximizes value creation.