Firms still relying on push to set inventory and guide production planning should rethink their strategy and consider demand pull, which places the primary emphasis on the consumption or shipment of goods rather than forecasting. The difference is akin to setting a fixed schedule to refuel your car every Monday (push) instead of monitoring the gas gauge and filling the tank when the level approaches empty (pull).
Does this somewhat minimalist approach to supply chain design stifle growth? Can a firm adopting this approach ramp up quickly enough to support the rapidly increasing demand that's bound to occur as the U.S. economy recovers? While consumption-based planning might appear to be incapable of handling this eventuality, the beauty of pull-based planning is that it's designed to handle uncertainty. The challenge, of course, is identifying how to incorporate and implement demand pull in your supply chain design.
Read Full Article
Enjoy curated articles directly to your inbox.