Compare Advantages of Push and Pull-Based Supply Chains Essay

618 Words Aug 5th, 2012 3 Pages
When dealing with traditional supply chain management strategies, the strategies are usually categorized as a push or pull strategy. A push system computes production schedules that are based on long-term forecasts of sales of end products. It is akin to Materials Requirements Planning. Because a pull system relies on forecasts, it takes a lot longer for a push-based supply chain to react to changes that can occur in the marketplace. The pull system is akin to the Just-in-Time system that was discussed in the Barilla case. This system was derived from the Japanese Kanban system that was developed at Toyota. The goal of a pull system is to deliver the correct amount of product at the correct time. Both production and distribution …show more content…
Using a pull-based supply chain typically grants a significant reduction in inventory levels. And of course lower inventory levels leads to lower cost levels. It also can provide a reduction in system costs when compared to the push-based system. However, not everyone can rationally or easily apply a demand pull system. Pull-based systems are more often than not difficult to implement when lead times are long because it is not pragmatic to react to demand information in this case. Taking advantages of economies of scale in manufacturing and transportation is also difficult when using a pull-based system.

Both the push and pull system has their advantages and disadvantages. Determining which system to incorporate into your own business can be very difficult. However, keep in mind the main advantages of each when choosing which to implement. The main advantages of each system are listed on the following page.

Push-based supply chain advantages:

1. Long-term forecasts and planning are used.
2. Inventory is stored and kept on hand. When products are generic, customization and enhancements can be satisfied quickly and in a timely manner.
3. Can lead to economies of scale in purchasing and production
4. Allows for planning and controlling

Pull-based supply chain advantages:

1. There is very little or minimal inventory kept on hand
2. Better meets supply and