Lean manufacturing uses demand pull. Demand pull means that the firm produces only This type of approach requires a just-in-time (JIT) purchasing system so that materials inventories will not build up. Long-term contracts are typically used to manage supplier relationships and reduce orders. The supplier base typically shrinks as the firm uses only a few favored suppliers. Fundamental to leaning manufacturing is the pursuit of perfection. To achieve this, firms eliminate waste wherever and whenever it is found. Sources of waste include the following: Defective products. Overproduction of goods not needed Inventories of goods awaiting further processing or consumption Unnecessary processing Unnecessary movement of people Unnecessary movement of goods Waiting Design of goods and services that do not meet customer needs Companies use a variety of methods to eliminate waste. An important part of a waste reduction strategy is employee involvement. Employee involvement requires participation by employees and greater responsibility. The organizational structure flattens and leads to greater communication between levels of management. Total quality control (TQC) is emphasized. TQC is striving for Inventories of all types are reduced as much as possible. Activity-based management and process value analysis are employed to measure the achievement of objectives and to wring out non-value-added activities