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Precise Definition

In an excellent paper on the widespread confusion and misconceptions in practice about what constitutes lean production (and its child concept - 'pull'), Hopp & Spearman define lean very precisely as: -

"Production of goods and services is lean if it is accomplished with minimal buffering costs."

(Hopp & Spearman, 2004, p.144)

Here, buffering costs include the costs of three kinds of buffers, all used to meet demand variability: -

1. Inventory buffers (stocking more WIP or finished goods inventory)
2. Capacity buffers (excess capacity)
3. Time buffers (increased lead times)

In order to clear similar confusion in the definition of 'pull' (which has been equated with Kanban use or with make-to-order production), Hopp and Spearman distinguish between two kinds of 'pull':

1. Strategic (or market) pull: Establishing a takt time to set the output of the plant to be equal to demand. Even MRP-based push systems can implement strategic pull.

2. Tactical pull: A pull production system is one that explicitly limits the amount of work-in-process that can be in the system. (Hopp & Spearman, 2004, p.142)

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* Contributed by -
Vaishnav Tadatmya Ashok,
IIM, Lucknow.