In a production factory that has successfully implemented a Pull System, what is typically observed?

In a production factory that has successfully implemented a Pull System, it is typically observed that there is less inventory. A Pull System is designed to produce goods based on actual customer demand rather than forecasting or pushing products through the production process. This approach minimizes excess inventory since production is directly linked to consumption. By pulling items through the system only when they are needed, it reduces the need to hold large amounts of stock, which can lead to inefficiencies and increased costs associated with storage and potential obsolescence.

Additionally, having less inventory can improve the overall efficiency of the production process, ensure better cash flow management, and enhance responsiveness to changes in customer demand. This is in contrast to other choices, such as adding inventory to cover demand, which would contradict the principles of a Pull System, or experiencing increased prices, which can stem from inefficiencies rather than direct outcomes of a Pull approach. Furthermore, a well-implemented Pull System should ideally lead to a lower defect rate as it encourages a focus on quality and problem-solving at each step of the production process, making higher defect rates unlikely.