Advantages of pull strategy in supply chain
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What’s driving your supply chain – immediate consumer demand or future projections? In either case, the goal is likely the same: to provide the best customer experience. A truly customer-oriented supply chain strives to fulfill the customers’ demands on-time. Success is defined by the on-time-delivery to request (OTD-R). In other words, when the product actually gets to the end consumer.
Supply chains are planned based on when a product is produced, delivered to distribution centers and made available at retail stores. The most common strategies for moving from upstream to downstream sites are push and pull strategies , or some mix of both. A pull strategy is when customer demand drives the entire production process. On the other hand, a push strategy is when production is based on long term customer forecasts. So which one is better? The answer is, it depends. There are pros and cons to using push vs. pull strategies within your distribution network.
Supply chains are planned based on when a product is produced, delivered to distribution centers and made available at retail stores. The most common strategies for moving from upstream to downstream sites are push and pull strategies , or some mix of both. A pull strategy is when customer demand drives the entire production process. On the other hand, a push strategy is when production is based on long term customer forecasts. So which one is better? The answer is, it depends. There are pros and cons to using push vs. pull strategies within your distribution network.
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Advantages of a pull strategy include higher service levels, lower carrying costs, decreased inventory levels and fewer markdowns. But perhaps most of all: the pull approach enables supply chains to adapt to demand faster, and allows for SKU and store differences
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