Essay Push and Pull

Lambton Collage

Term 1

Professor: Manan Gupta

September 17, 2023

The good performance of the supply chain is one of the most important aspects for companies to
maximize added value to customers, resulting in increased profitability for the company. Changes
in demand and the emergence of new technologies have led companies to develop two main
approaches known as push and pull methods. Each of them has its advantages and disadvantages
and depends on the execution time in relation to customer demand. Additionally, they use macro
processes for solid supply chain relationship management to achieve a competitive advantage. In
this essay, we will explore these approaches and macro processes.

We can start by examining the push method, which is a traditional and speculative approach where
production begins before customer orders and is based on forecasts and internal company
decisions. This leads companies to display their merchandise to consumers to facilitate the sale of
their products. One of the major disadvantages of this method is changes in demand that can
render inventory products obsolete, resulting in financial losses for the company. An example of
this method can be clearly seen in beverage and technology companies, such as Coca-Cola, which
invests approximately $4 billion (Statista) in advertising, and technology companies like Apple,
which generates high anticipation for its product launches, also offering time-limited promotions
and discounts to create urgency among consumers.

With an understanding of how the push method works, we can now analyze the pull approach,
which begins with a customer order that triggers a sequence of processes to manufacture the
necessary quantity of requested products. It is associated with the Just-in-Time system, which
minimizes inventory storage costs. One of the disadvantages is that some customers are not willing
to wait to receive their purchases. Therefore, companies using this approach must have an
excellent reputation and product quality. For example, Tesla combines technological innovation, a
strong brand, and a focus on sustainability to attract consumers, which has been crucial to its
success in the automotive industry.

For the implementation of these methods, the development of three macro processes in the
supply chain is crucial:

Customer Relationship Management (CRM): Focuses on meeting customer needs through effective
communication and the ability to provide solutions to their desires.

Internal Supply Chain Management (ISCM): Aims to establish good relationships between
departments to plan strategies, demand, and collaboration with suppliers.

Supplier Relationship Management (SRM): Involves the careful selection of suppliers, clear
contracts, and collaboration in design.
In conclusion, the implementation of these methods depends on the type of business, so it is
essential to understand the company, production capacity, analyze available storage space, and
manufacturing costs. Always keep in mind that effective management of customers, suppliers, and
internal processes is crucial for efficiency and competitiveness.

REFERENCES
Admin. (2023, February 26). Push and Pull Strategies in Marketing | Explained with

examples - The Strategy Story. The Strategy Story - Simplifying Business Strategies.

https://thestrategystory.com/blog/push-and-pull-strategies-in-marketing-explained-

with-examples/

Coca-Cola Co.: ad spend 2022 | Statista. (2023, April 18). Statista.

https://www.statista.com/statistics/286526/coca-cola-advertising-spending-

worldwide/

The Coca-Cola company: Refresh the world. Make a difference. (n.d.). https://www.coca-

colacompany.com/