CONSIDERATION FOR MIX PUSH AND PULL


Companies often feel that they must choose between employing a push or pull replenishment strategy. In pull model inventory is not stored in large warehouses but supplied when a new product is ordered by downstream consumers. This method is contrasted with push method of manufacturing where products are manufactured on a line without regard for the upstream demand by the end user. The objective of pull approach is to improve productivity and reduce waste and costs. One of the key steps in achieving this is to limit inventory levels by moving towards just-in-time principles. An overview of the both approaches is presented as under:

The ability to be lean (pull) but at the same time to cope with disruptions (be resilient) is the real challenge, which is associated with conflicting aims. Inventory holding costs and lost customer order costs are key components of the overall profit for any organization. Optimal pull and push combination is practiced in many organizations for getting following advantages: