Supply Chain Integration - Push, pull and push-pull systems - Implementing a push-pull strategy

7 important questions on Supply Chain Integration - Push, pull and push-pull systems - Implementing a push-pull strategy

When do we apply the push strategy?

The push strategy is applied to that portion of the supply chain where demand uncertainty is relatively small and, thus managing this portion based on long-term forecast is appropriate.

When do we apply the pull strategy?

The pull strategy is applied to that portion of the supply chain where uncertainty is high and, hence, it is important to manage this portion based on realized demand.

When do we focus on cost minimization?

In the push portion since uncertainty is small, service level is thus not an issue. In addition, this portion of the supply chain is characterizes not only by low demand uncertainty and economies of scale and/or transportation, but also by long lead times and complex supply chain structures.
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How can a high service level be achieved?

By deploying a flexible and responsive supply chain, that is, a supply chain that can adapt quickly to changes in customer demand. This implies that different processes need to be used, here: order fulfillment processes need to be optimized.

How can the two supply chain strategies be coordinated?

By using a buffer inventory.

What does a buffer inventory mean in the push portion of the supply chain?

The buffer inventory at the boundary is part of the output generated by the tactical planning process.

What does a buffer inventory mean in the pull portion of the supply chain?

The buffer inventory represents the input to the fulfillment process.

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