Are you a pusher or a puller? - Collis Williams, Eagle
Pushers push expecting consumer demand while pullers pull when there is consumer demand.
Before we cut into the meat of the matter, let's first touch on a few things, which will provide context for what will be discussed following.
A supply chain is a network between a business, its suppliers and the business' customers. In the construct of managing that network, we engage a combination of human capital, logistics processes, materials and information flow systems. It’s the supply chain manager that seeks to keep this tripartite chord in harmony in the commercial jungle where we all demand reward.
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. As such, inventory is pulled through the system as a function of the demand rate.
What's best for you?
The pull system of supply chain management is quite compelling in today’s difficult commercial environment. Made easier by the advancement in software solutions, which make supply chain management extremely scientific. Such solutions allow for total collaboration and visibility of the supply chain from the point of order and manufacturer, all the way to the consumers' hands.
There are many advantages to be had from the pull model of supply chain management.
Reduced warehousing and logistics costs.
Only mobilizing what the customer demands at the rate at which they demand it, allows for reduction in the amount of labour that may be needed.
The closer your supply chain moves to real-time customer demand fulfillment, the greater the reduction in the risks of overproduction and its attendant costs as well as incorrect allocation of inventory.
Operating a pull system of supply chain management allows leadership to respond to changes in customer tastes and expectations quickly and easily.
The push supply chain model is not without its merits. Typically, this model gives access to greater economy of scales when purchasing and is ideal to be used as a buffer when forecasting is unpredictable. Additionally, it is a great solution when supply chains are long and capital allows for a monopolistic approach to the market. Experience has taught us that, it’s a hybrid of the push and pull approach that serves companies in the Caribbean well.
The Bottom Line
Improve forecasting by adapting RDL Eagle's supply chain solution, which measures every element of your supply chains. “What gets measured, gets managed!”
Reduce lead times where possible and in so doing reduce dependence on forecasting.
Segment those parts of your company that can exist on pull supply chain systems as opposed to those that must remain on push systems and build supply chains to match what you are seeking to achieve with each system.
Remember... pull systems wherever possible.
At the end of the day, the customers' satisfaction informs the solution. RDL Eagle can help make your supply chains work for you. Consult RDL.