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Push-Pull Strategy

In: Business and Management

Submitted By Swarna
Words 669
Pages 3
Assignment – 3

Supply Chain Integration- Strategies

Introduction: Supply Chain Management revolves around various activities which are when integrated results in better performance of business. There is a need to integrate all these activities for a Value Supply Chain by reducing costs, reducing bullwhip effect, utilize better resources, increase service level. More importantly, by integrating the front end of supply chain, Customer Demand to the back end of the supply chain, production and manufacturing portion of it. This report lists the typical characteristics of the below mentioned strategies by considering a product and see how the strategy has been implemented. They are:

▪ Push Strategy

▪ Pull Strategy

▪ Push-Pull Strategy

▪ Pull-Push Strategy

Push Strategy: In Push based Supply Chain Strategy,

▪ Production and Distribution strategies are based on long term forecasts.

▪ Manufacturers depend on demand forecasts and orders given by the retailers.

▪ Products are known to the customer and so the demand is moderately constant.

Product Considered: Generally the FMCG products follow this type of strategy. Consider Rice, Staple food of Countries like India. The production is moderately constant by all the farmers and is season based. They don’t consider demand for production decisions and the production is continuous. Continuous production takes place the product is released in to the market.

In this case, the manufacturers fail to meet the huge demand variations of the market and this may result in excessive inventories and increased transportation costs. It also much longer time for them to react to the changing market place.

Pull Strategy: In this Pull- based Supply Chain strategy,

▪ Production and Distribution are demand driven so that they are coordinated with customer demand rather than

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