END TO END PULL

 

How End to End Pull Works

In an End to End (E2E) Pull system, pull loops are established between preceding and succeeding locations. This can be expanded to as many loops or tiers as needed, depending upon the business process of the manufacturer.

An E2E Pull system allows each node to synchronize real-time production and delivery with consumption. The results included increased on-time delivery performance, reduced stock-outs, and elimination of costly last-minute change orders.

In the most extensive utilization of E2E Pull, the tiers could be retailer, regional warehouses, central warehouses, distribution centers, manufacturing plants, component manufactures, 3PLs, and suppliers.

As orders arrive, material is pulled from the end of the final assembly line, which instantly sends an order to final assembly to produce more. Simultaneously, the speed at which manufacturing facilities deplete raw materials and components drives replenishment to the upstream supply chain.

Establishing multiple loops beyond the manufacturing facility demonstrates physical material flows; from the time material enters the supply chain until the finished good or service is in the hands of the end customer explains the phrase, end-to-end supply chain.

These interconnected loops control the schedule as goods move from the supplier to raw material warehouses, from raw material warehouses to the point of use; from finished goods assembly to distribution centers, and from distribution centers to the end customer.

E2E Pull also affects business processes outside the enterprise, providing an end-to-end process view that facilitates real-time collaboration with customers and suppliers.

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Gartner Research Analysts recommends manufacturing companies to engage with customers and suppliers to establish a pull process from Finished Goods all the way to Raw Materials. This is what Gartner defines as End to End (E2E) Pull replenishment.

The Challenge of Customer Satisfaction

E2E Pull represents a paradigm shift away from the focus on improving forecasts and algorithms. In a manufacturing pull system, resource flows are controlled based upon customer demand, rather than forecasting. Raw materials and components usage at manufacturing facilities drive replenishment to the upstream supply chain. In this way, E2E Pull provides full visibility, scheduling, and sequencing of materials and goods throughout an organization.

Finished goods inventory planning is often driven by historically-based sales forecasts rather than customer consumption and inventory holding patterns. Faulty sales forecasts erroneously drive raw material and components planning, creating costly errors.

In spite of this inherent flawed approach, manufacturing companies have tried to improve customer satisfaction levels through better forecasting, increased inventory levels, and optimized production. Even with these best efforts, the results are frequently disappointing.

  • Many companies carry large amounts of inventory to meet customers’ changing demands, which are often based on inaccurate forecasts and result in an unwieldy number of SKUs.
  • Constantly fluctuating customer demand causes operational instability and increased costs due to expediting, equipment set up, and employee overtime.
  • Exceptions generated during every MRP run, creates a common and expensive problem for suppliers. These exceptions alert buyers to expedite, defer, or cancel outstanding orders.
  • Exceptions are the result of changes in forecasts and planned orders fed into and manufacturer’s MRP. This constant push, pull and cancellation of orders leads to a bull-whip effect on suppliers that results in short shipments, late shipments and stock outs.

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Ultriva E2E Pull Unique Value

For the past decade Ultriva has been helping customers establish E2E Pull processes. The underlying methodology used to set up the pull process is collaborative Kanban. By engaging with customers such as Original Equipment Manufacturers, distribution centers, retail channels, and end-user customers, manufacturers are gaining better control over downstream demand. Ultriva allows clients to quickly sense the changes in demand and adjust production schedules to minimize redundant finished goods inventory. See the top 7 reasons to use E2E Pull.

Benefits of E2E Pull

E2E Pull-based supply chain management allows manufacturers to engage more fully with customers, distribution centers, retail channels and end user customers. Manufacturers gain visibility into and control over downstream demand. Manufacturers quickly sense the changes in demand and adjust production schedules to minimize redundant finished goods inventory. Basing production on real demand and moving suppliers from forecast to consumption-driven replenishment delivers multiple benefits.

 

Ultriva E2E Pull Benefits:

  • Manages each production loop for lot size, lead times, safety stock and usage, dramatically reducing the production disruptions that lead to stock-outs.
  • Provides a customer’s consumption patterns and the trend analysis to determine a customer’s future requirements. E2E Pull allows companies to design a supply chain and feed forecasting inputs with granular data at the execution level.
  • Delivers visibility into material flows across multiple departments, including planning, purchasing, supply chain, sales, manufacturing, logistics, and executives.
  • Enables manufacturers to balance supply with customer demand through procurement strategies, materials, and inventory policies tied to actual demand signals.
  • Brings numerous positive effects including optimized finished goods, WIP, and raw materials inventories. There are also significant reductions in production disruptions, which lead to improved customer service satisfaction levels.

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Why a Cloud Solution is the Only Way to Implement E2E Pull. Find out the minimal requirements for a solution to establish the E2E Pull process.

 

 

 

 

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