How to Use Your ERP to Create a Pull System for Manufacturing

While ERP systems provide robust tools for managing materials and production schedules, many organizations still struggle with overproduction, high inventory, and poor responsiveness to customer demands. The solution? Create a pull-based manufacturing system integrated directly with your ERP.

This is a production management methodology pioneered by Altemir Consulting to reduce lead times and improve on-time shipments.

What is a Pull System?

A pull system is a core principle of lean manufacturing that ensures production and material replenishment are triggered by real customer demand rather than forecasts. Unlike traditional push systems, which rely on predicted demand to drive production schedules, pull systems prioritize flexibility, responsiveness, and efficiency.

Key benefits of a pull system include:

• Reduced Inventory: Materials and finished goods are produced only as needed.
• Improved Lead Times: Faster response to changing customer demands.
• Waste Reduction: Elimination of overproduction and idle inventory.

Why Integrate a Pull System with Your ERP?

ERP systems are often seen as the domain of push systems due to their reliance on forecasting and batch-based scheduling. However, with the right approach, your existing ERP can be leveraged to establish pull-based production flow:

• Centralized Data: ERP systems consolidate demand, inventory, and production data, enabling real-time decision-making.
• Automation: There are ways to enable virtually any ERP that supports production scheduling to mediate shop floor production flow via kanban signals.
• Visibility: Real-time tracking of production ensures that materials flow smoothly through the system.

Steps to Create a Pull System Using ERP

1. Analyze Your Current ERP Data Quality

• Evaluate Demand Data: Ensure customer orders and forecasts are accurately captured in your ERP system.
• Assess Inventory Accuracy: Conduct a full audit of inventory records to eliminate discrepancies.

2. Create a Customer-Driven Production Schedule

• Ensure that your production schedule is rigidly tied to customers' requirements so it can drive the proper work priorities throughout the supply chain.

3. Create Virtual Kanban Signals

• Create custom dispatch lists at each work center that mediate lean flow

4. Monitor and Adjust in Real-Time

• KPIs: Track metrics like on-time delivery, inventory turnover, and lead time reduction using ERP dashboards.
• Capacity Planning: Use ERP capacity reporting to ensure that work centers are neither overloaded nor underutilized.
• Feedback Loops: Regularly review performance data and make adjustments to maintain alignment with customer demand.

Common Challenges and Solutions

Challenge 1: ERP Data Quality

Solution: Audit ERP data to ensure accuracy and implement data governance processes to keep data quality high.

Challenge 2: Resistance to Change

Solution: Involve teams early in the process, provide training, and emphasize the benefits of a pull-based approach.

Challenge 3: System Limitations

Solution: Partner with ERP consultants or developers to customize workflows and implement advanced capabilities for your particular ERP system.  Often, custom capabilities can be added.

Real-World Success: A Pull System in Action

A medical device manufacturer struggled with high inventory levels and long lead times. By integrating a pull system into their ERP, they achieved:

• 35% Inventory Reduction: Materials were ordered only as needed, freeing up valuable working capital.
• 50% Faster Lead Times: Real-time kanban triggers streamlined production flow.
• Improved Customer Satisfaction: On-time delivery rates soared as production became more responsive.

Conclusion

Transforming your ERP system into a pull-based manufacturing tool doesn’t require a new platform—it requires a new mindset. By configuring your ERP to align with lean principles, you can reduce waste, improve responsiveness, and enhance customer satisfaction.

Ready to implement a pull system in your manufacturing operations? Learn how Altemir Consulting can help you optimize your ERP and achieve operational excellence.

Schedule a discovery call today to begin implementing a pull system for your facility.