Push–pull strategy

The business terms push and pull originated in logistics and supply chain management, but are also widely used in marketing and in the hotel distribution business. Walmart is an example of a company that uses the push vs. pull strategy. Supply chain management There are several definitions on the distinction between push and pull strategies. Liberopoulos (2013) identifies three such definitions: A pull system initiates production as a reaction to present demand, while a push system initiates production in anticipation of future demand. In a pull system, production is triggered by actual demands for finished products, while in a push system, production is initiated independently of demands. A pull system is one that explicitly limits the amount of WIP that can be in the system, while a push system has no explicit limit on the amount of WIP that can be in the system. Other definitions are: Push: As stated by Bonney et al. (1999) control information flow is in the same direction of goods flow Semi push or Push-pull : Succeeding node makes order request for preceding node. Preceding node reacts by replenishing from stock that is rebuilt every fixed period. Pull : Succeeding node makes order request for preceding node. Preceding node reacts by producing the order, which involves all internal operations, and replenishes when finished. Semi-pull or pull-push : Succeeding node makes order request for preceding node. Preceding node reacts by replenishing from stock that is rebuilt immediately. There are several levels of semi-pull systems as a node can have stock at several layers in an organization. With a push-based supply chain, products are pushed through the channel, from the production side up to the retailer. The manufacturer sets production at a level in accord with historical ordering patterns from retailers. It takes longer for a push-based supply chain to respond to changes in demand, which can result in overstocking or bottlenecks and delays (the bullwhip effect), unacceptable service levels and product obsolescence.