What is a primary benefit of implementing a 'pull' system in production?

Implementing a 'pull' system in production primarily reduces inventory holding costs because it aligns production closely with actual customer demand. In a pull system, products are made only when there is a demand for them rather than being produced in large batches in anticipation of future sales. This just-in-time approach minimizes excess inventory and the costs associated with storing unused products. By synchronizing production with demand signals, companies can reduce the amount of capital tied up in inventory, leading to lower holding costs and increased efficiency in their operations.

This benefit is crucial for businesses aiming to streamline their operations, reduce waste, and enhance overall profitability. While other options may offer benefits, the reduction of inventory holding costs is one of the most critical advantages of adopting a pull system, making it a core aspect of lean manufacturing and efficient supply chain management.