What are the differences between push and pull supply chain strategies?

In Push Strategy you estimate the demand and produce it even before the sale has occurred, whereas in the Pull Strategy you manufacture as per the Customer demand. Push can work with product categories where demand is predictable and lead times are long, on the other hand, it can also result in excess inventories and more waste in the processes Pull on the other hand is more agile and responsive. A pull strategy is suitable for products that have volatile and unpredictable demand, and short lead times. The inventories can be lean and bare minimum in Pull which increases the flexibility, and resource utilization. However, a pull strategy can also result in long waiting times if the demand is more and capacity is limited.

Desde mi punto de vista, la estrategia push no se aplica en la mayoría de los casos para productos perecederos, este tipo de productos es de un tratamiento delicado, quiza está estrategia es adecuada para la producción de artículos cómo por ejemplo: teléfonos, pantallas de televisión, cepillos de dientes entre otros, estos artículos tienen cierta cadencia en su rotación lo que permite una función optima de un plan de demanda push, no olvidar que para esté tipo de demanda, la empresa que la utilice tiene que tener cierto tipo de solvencia en la capacidad de almacenamiento del producto terminado. Estos y otros factores son importantes a tomar en cuenta para que una empresa funcione con demanda push.

The push supply chain is driven by long-term projections of customer demand. This type of planning becomes valuable to companies as it helps them plan for events in the future and be prepared when winter comes. This gives the companies time to meet their needs and time to figure out other logistics like where to store the inventory. A push strategy relies on often wrong predictions. High variable expenses, divestments, discounting, missed sales, stock shortages, high levels of debt, and rescheduled production cycles are other drawbacks of this approach.

A push strategy involves anticipatory production based on demand forecasts, facilitating product movement through the supply chain before customer orders. Suited for products with stable demand, lengthy lead times, high customization, or low inventory costs, it mitigates stockouts, ensures punctual delivery, and upholds quality. Yet, it may yield surplus inventory, elevated obsolescence costs, diminished responsiveness, and resource inefficiency.

A business running on the push strategy primarily works on the basis of market intelligence, demand forecasts and historical data of the supply chain. The business determines the inventory in the supply chain at the vendor, manufacturing units and distribution centers so that their representatives can carry out sales with different customers on the basis of forecasts and commitments. The commitment to inventory and resources is very high, and often the pressure to sell is very high in these environments. For long lead time manufacturing and for mass produced components this strategy is preferred. Often this strategy is ridden with risk of high costs due to fluctuating demands since the responsiveness of the supply chain is very poor

The pull supply chain strategy is driven by actual customer demand. In this type of supply chain logistics, inventory is acquired on a need basis. This type of planning benefits include less wastage in the case of lower demand. The problem, however, is that the company might not have enough inventory to meet rising demands due to unforeseen factors.

La estrategia pull es bastante delicada, desde el punto de vista en que tiene que haber una sinergia absoluta entre el proveedor, el fabricante y el cliente, esto debido a que se trabaja casi que con un modelo just in time, para mí la demanda pull tiene un margen de error muy pequeño, aquí radica la importancia de una buena asertividad en los pronósticos que se realicen, una buena asertividad en los pronósticos dictará que tan exacto es el abastecimiento en el proceso de la cadena de suministro, la demanda pull en todo sentido abarata costos siempre y cuando exista esa buena sinergia entre todas las partes.

A supply chain that follows the pull strategy basically relies on the customer driving the inventory demand. This is especially a preferred strategy for discrete manufacturing set ups where the entire supply chain starting from the customer at one end, the distribution centers, manufacturing units and the material vendors on the other end of the chain are aligned in terms of replenishment quantities, lead times and service levels. Additionally internally within a manufacturing unit the production lines also are aligned to this rhythm with the finished goods warehouse acting like the end customer driving the same rhythm. This ensures minimum inventory in the supply chain, places a high demand on product quality and efficiency of logistics

The hybrid strategy is a combination of the push and pull strategy in which the company will use a push strategy to move products, and then a pull strategy to encourage purchasing from retailers. The hybrid strategy is usually suggested for products in which uncertainty in demand is high. The hybrid approach allows for a balance between the benefits of both strategies, optimizing inventory management and reducing carrying costs.

Most successful businesses run a mix of push and pull strategies. This hybrid strategy could be on the basis of stage of manufacturing or based on product lines. High runner products could follow a push strategy to maximize volumes of sales, whereas more specialised or customized products can run on a pull strategy. Similarly, mass customized products such as cars, electronics and clothes, can use this strategy. The push strategy could be used up to a point of manufacturing, followed by a pull strategy for specific customisations that are driven by the end customer. This type of manufacturing requires a very strong product design or product portfolio, and is generally considered a very good middle ground floor managing a supply chain

Factors to consider for the type of supply chain strategy are: 1. Product portfolio: Supply chain strategy can change depending on the nature of the product. Mass consumption vs customisation, patented design vs established design, high runner vs capital intensive goods, are some of the factors to consider 2. Financials: Strategy also varies from the business to business based on the appetite for inventory, resource and space. Financial strength also gives businesses the advantage to drive vendors and customers towards specific strategies 3. Customer: the customer drives everything in a business. With rigid customers, it is not possible to have a pull strategy whereas a customer open to agile planning can help the business be lean.

Consider the following factors while choosing a supply chain strategy for your product: 1. Customer Demand: A push strategy could be effective if your product has stable and predictable demand. However, a pull strategy would be more suitable if demand is volatile. 2. Inventory: If high inventory costs are a concern, a pull strategy can help minimize them; otherwise, a push strategy may be more beneficial. 3. Lead Time: If your production lead times are long, a push strategy can ensure that products are available when customers need them. If you can produce goods quickly, a pull strategy can be effective.

FMCG companies such as Unilever and Coca Cola use a push strategy in their supply chain management. They predict consumer demand for their products and then push their inventory to retail stores and meet the increasing demand. While many companies, such as UPS and FedEx, use a pull strategy in their reverse logistics operations. These companies pick up returned products from customers only after they have placed a return request. This helps to reduce the amount of unnecessary transportation and handling of returned products.

As an Industrial Engineer, I executed a pull strategy by implementing lean manufacturing principles to optimize processes and enhance operational efficiency. By minimizing waste and streamlining production workflows, I aimed to create value for end-users. Collaborating with cross-functional teams, we identified and addressed areas for improvement, aligning efforts to deliver high-quality products meeting consumer demands. Leveraging data-driven insights, I optimized processes, reducing lead times and improving product quality, generating a pull effect in the market. I ensured employee alignment with our customer-centric approach, increased satisfaction, and positioned our processes as agile and responsive to evolving market needs.

Supply chain optimization is managing the supply chain to attain peak efficiency defined by key performance indicators. Key benefits of supply chain optimization include; higher efficiency rates, improved quality control, better flow of materials and information, improved risk mitigation, effective inventory management, better supply chain collaboration, and increased customer satisfaction.

In a modern business model it is (in my opinion) not an option to optimise your supply chain but a must. Besides the economic benefits, optimising your supply chain provides you with insights in the challenges your suppliers are facing. You might even be able to make adjustments at your end to help your supplier. This strengthens the relationship but more importantly the stability and security of your supply as well.

Básicamente existen 3 actores en la cadena de suministro, tu proveedor, tu empresa, tu cliente, considerando que existe una buena comunicación entre las 3 partes la cadena de suministro debería de fluir correctamente, desde el punto de vista de una buena negociación con el proveedor en tema de precios y entregas de materias primas, posteriormente tu empresa tiene que gestionar de la mejor manera los inventarios, en cuanto a costos de almacenamiento, manejo de volumenes en cantidad y tiempo correctos para producir entre otros, además como punto final y no menos importante cuidar la relación con el cliente en temas de suministrar en tiempo y cantidad correcta el producto que desee, en este último punto existe un indicador recomendado OTIF.

When designing push or pull supply chain strategies, factors like demand predictability, product perishability, and customer preferences are crucial. Push strategies suit predictable demand, while pull strategies are agile for variable demand. Consider the product's shelf life, market volatility, and the need for customization to determine the optimal approach. But ultimately, balancing inventory costs and responsiveness is vital in achieving an efficient and customer-centric supply chain.

Cuando hablamos de "push", la producción se basa en pronósticos de demanda. Es decir, los productos se fabrican y se envían a lo largo de la cadena antes de que se realice una venta real. Por otro lado, al hablar de "pull", la producción se inicia en respuesta a la demanda real, evitando el exceso de inventario y produciendo según lo requieran los pedidos reales.