Supply Chain Integration - The impact of lead time
3 important questions on Supply Chain Integration - The impact of lead time
Which strategy should be used when having Low Demand Uncertainty and Long Lead Times?
A push strategy (Box B).
Explain the continuous replenishment strategy.
In such a strategy, suppliers receive POS data and use these data to prepare shipments at previously agreed-upon intervals to maintain specific levels of inventory. Thus, since customer demand drives production and distribution decisions in this supply chain, this strategy is a pull strategy at the production and distribution stages and push at the retail outlets.
Explain the inventory positioning strategy.
Inventory is critical in this type of environment, but this requires position inventory strategically in the supply chain. Different stages of the supply chain are managed in different ways, depending, among other things, on economies of scales. Those stages that keep inventory are managed based on push and other are managed based on pull.
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