How does the push system differ from the pull system?
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The original meaning of push and pull, as used in operations management, logistics and supply chain management. In the pull system production orders begin upon inventory reaching a certain level, while on the push system production begins based on demand (forecasted or actual demand). The CONWIP is a hybrid between a pure push and pure pull system. The image shows a technology push, mainly driven by internal research and development activities and market pull, driven by external market forces.[1] The business terms push and pull originated in logistics and supply chain management,[2] but are also widely used in marketing[3][4] and in the hotel distribution business. Walmart is an example of a company that uses the push vs. pull strategy. Supply-chain management[edit]Complete definition[edit]There are several definitions on the distinction between push and pull strategies. Liberopoulos (2013)[5] identifies three such definitions:
Other definitions are:
Information flow[edit]With a push-based supply chain, products are pushed through the channel, from the production side up to the retailer. The manufacturer sets production at a level in accord with historical ordering patterns from retailers. It takes longer for a push-based supply chain to respond to changes in demand, which can result in overstocking or bottlenecks and delays (the bullwhip effect), unacceptable service levels and product obsolescence. In a pull-based supply chain, procurement, production and distribution are demand-driven rather than to forecast. However, a pull strategy does not always require make to order production. Toyota Motors Manufacturing is frequently used as an example of pull production, yet do not typically produce to order. They follow the "supermarket model" where limited inventory is kept on hand and is replenished as it is consumed. In Toyota's case, Kanban cards are used to signal the need to replenish inventory. A supply chain is almost always a combination of both push and pull, where the interface between the push-based stages and the pull-based stages is sometimes known as the push–pull boundary.[7] However, because of the subtle difference between pull production and make-to-order production, a more accurate name for this may be the customer order decoupling point. An example of this is Dell's build to order supply chain. Inventory levels of individual components are determined by forecasting general demand, but final assembly is in response to a specific customer request. The decoupling point would then be at the beginning of the assembly line.
In a marketing pull system, the consumer requests the product and "pulls" it through the delivery channel. An example of this is the car manufacturing company Ford Australia. Ford Australia only produces cars when they have been ordered by customers.
Use of pull, push, and hybrid push-pull strategy[edit]Harrison summarized when to use each one of the three supply chain strategies:
Examples in push and pull[edit]Hopp and Spearman consider some of the most common systems found in industry and the literature and classify them as either push or pull
Liberopoulos (2013)[5] also classifies common systems according to different definitions on the distinction between push and pull. Marketing[edit]An advertising push strategy refers to a situation when a vendor advertises its product to gain audience awareness, while the pull strategy implies the aims to reach audiences which have shown existing interest in the product or information about it.[10] The difference between "push" and "pull" marketing can also be identified by the manner in which the company approaches the lead. If, for example, the company were to send a sales brochure, that would be considered pushing the opportunity toward the lead. If, instead, the company provided a subject matter expert as a speaker for an industry event attended by targeted leads, that could be one tactic used as part of a strategy to pull in a lead by encouraging that lead to seek out the expert in a moment of need for that expertise. Hotel distribution[edit]The online world has brought this pull push decision to the hotel distribution business
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What is the difference between a push and pull supply chain?A push supply chain is generally defined as a collaboration of events needed to secure products or inventory in anticipation of consumer demand. On the other hand, in a pull system, the supply chain only responds when there is consumer demand.
What is the difference in the push vs pull concept in lean manufacturing?As we just covered, in push manufacturing, production dictates the amount of product that is pushed onto the market. On the flip side, pull manufacturing responds directly to customer demand instead. This means that the product is only fabricated and assembled when a customer places an order.
Why is a pull system better than a push system?Pull systems are often preferred in situations where there is limited demand for a specific product, or when the cost of managing excess inventory outweighs the benefit of having a surplus of product in stock.
What is the push and pull model?Push and pull distribution strategy is all about directing your promotional route to market. Either by the product being pushed towards customers or your customers pulling the product through the retail chain towards them.
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