From the course: Lean Inventory Management
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Forecast inventory for lean
From the course: Lean Inventory Management
Forecast inventory for lean
- One of the most common misconceptions of using a lean strategy, is that you no longer have to forecast customer demand. Forecasting means you are trying to predict some future situation or event, in this case, you forecast to estimate customer demand for your products. But lean is a just-in-time system. A just-in-time system means that materials move through the organization only when needed by the next step. That need is activated by specific customer order. So in a sense, the order is pulling material through the system until the final product is delivered to the customer. So it makes sense that you no longer need to forecast. You know what to make because the actual orders define your customer demand. Dell computer is a good example of such a just-in-time pull system. Dell does not make a computer until you place your customized order. Just like a restaurant does not make your dinner until you order the meal. Once you place your order with Dell, they assemble and ship your…
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