What is a push and pull strategy in supply chain management? Which is better than the other? Which strategy to adopt? (2024)

• Push and pull strategy refers to two different approaches to managing the flow of goods in a supply chain management.
• A push strategy aims to keep products in stock even before the customers order them.
• A pull strategy produces goods in accordance with the demand of the customers.
• While Coca-Cola uses a push strategy, companies like Toyota use a pull strategy in supply chain management.
• There are many similarities between push and pull strategies, including their goal and need for flexibility.
• The differences between the two range from lead time to inventory management.
• In real life, most businesses like Amazon use a mix of both push and pull strategies.

Factors to consider when choosing between strategies

Push and pull strategies in supply chain management are two distinct approaches to managing the flow of products from manufacturers to consumers. Both pull and push strategies have their own advantages and disadvantages. You should consider several key factors to ensure that you choose the right strategy that matches your business needs:

Product characteristics

You should choose between a push or pull strategy considering the nature of the product that you are selling. You should keep the product characteristics in mind, like its shelf life, demand predictability, and variability.

Cost structure

You must determine the cost structure of your business before choosing between a push or pull strategy. Do you want to minimize upfront costs? Can you risk the cost of overproduction? Push strategies have higher upfront costs. Meanwhile, pull strategies have lower upfront costs.

Market Conditions

Before choosing between a push or pull strategy, it is important to understand the target market condition and customer preferences. You must monitor customers’ purchasing behavior and demand patterns.

Conclusion

In real life, no businesses rely entirely on either push or pull logistics but instead employ a mixture of the two to make the best use of them. Modern-day supply chain operations are very complex and consist of steps from getting the raw materials to delivering the final product to the end consumer.

But here, it is crucial to note that, to build the optimal push versus pull combination, there is no one-size-fits-all approach to develop the ideal push vs. pull mix. When designing their specific combination of Push and Pull strategies, brands must understand their campaign objectives, target audience, and budget constraints.

You can respond effectively to evolving consumer demands by combining both pull and push approaches while maintaining economies of scale within your current operations.