Supply Chain Management Push and Pull Based Chains

SUPPLY CHAIN MANAGEMENT: PUSH AND PULL BASED CHAINS INTRODUCTION Fierce competition in today’s global markets, the introduction of products with shorter life cycles, and the heightened expectations of customers have forced business enterprises to invest in, and focus attention on, their supply chains. This, together with continuing advances in communications and transportation technologies (e.g., mobile communication, Internet, and overnight delivery), has motivated the continuous evolution of the supply chain and of the techniques to manage it effectively. The supply chain is a flow of materials, information and money through a network of suppliers, manufacturers, distributors and customers. A supply chain consists of all the stages†¦show more content†¦The results of the study indicated little change in technology was required to improve performance, other than further development of EDI and POS systems. However, the study identified a set of best practices which, if implemented, could substantially improve overall performance of the supply chain. As Kurt Salmon and Associates (1993) found: By expediting the quick and accurate flow of information up the supply chain, ECR enables distributors and suppliers to anticipate future demand far more accurately than the current system allows. Through implementation of best practices they projected an overall reduction in supply chain inventory of 37 percent, and overall cost reductions in the industry in the range of $24 to $30 billion. The successful adoption of ECR for a manufacturer depends on their ability to maintain manufacturing flexibility which enables them to match supply with demand. Key to this flexibility is a process that tightly integrates demand management, production scheduling, and inventory deployment to allow the company to better utilize information, production resources, and inventory (Weeks and Crawford, 1994). A further development from ECR was the concept of continuous replenishment (CRP). CRP is a move away from pushing product from inventory holding areas to pulling products onto grocery shelves based on consumer demand (ECR Performance Measures Operating Committee, 1994). Point of purchase transactions areShow MoreRelatedPush V Pull Strategy1067 Words   |  5 Pagesbusiness terms push and pull originated in the logistic and supply chain management,[2] but are also widely used in marketing.[3][4] A push-pull-system in business describes the movement of a product or information between two subjects. On markets the consumers usually pulls the goods or information they demand for their needs, while the offerers or suppliers pushes them toward the consumers. In logistic chains or supply chains the stages are operating normally both in push- and pull-manner.[5]Read MoreCompare Advantages of Push and Pull-Based Supply Chains Essay618 Words   |  3 PagesWhen 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 wasRead MoreFord Implementation of Vi rtual Integration: A Push Pull Strategy.1587 Words   |  7 PagesIntroduction With the implementation of Ford’s restructuring plan, Ford 2000, the company has set forth goals to compete with the expansion of foreign-based auto manufacturers globally. 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AccordingRead MoreTransportation and Distribution4133 Words   |  17 PagesTransportation is a key logistics function. Efficient and effective management of transportation at each stage of the supply chain is crucial for both cost management and service level guarantees. We have already looked at the incidence of transportation costs on overall supply chain performance in chapter 3 when we discussed the design aspects of logistics networks. Cost remains one of the key concerns regarding transportation management. The 12th Annual  State  Of Logistics Report  ( USA ) provides a figure