Push and pull system

Kanban
 Push system
• Caters to homogenized products
• With stable demand
• Production of items required by a given schedule
in advance
• Production & distribution decisions are based on
long-term forecasts as demand is stable
• Very commonly used in 1950s to 1970s when
the organizations were vertically integrated
• When manufacturing happened in “demand
surplus environment” of mass products
 Push system
• E.g.. Arvind Mills Ltd. One of the largest denim
manufacturer's in the world
• “Made-to-stock environment”
• Difficult for a company to follow the same where
high fluctuation in market demand exists
• Accumulates excess inventory by the time it
responds to the changing demand
• Entails large production batches incompatible for
catering demand of short quantity
 Push system :bull whip effect
• Generates more buffer or safety stock at each
node of supply chain due to BULL WHIP
EFFECT due to inability of individual
manufacturer of fiber, yarn, fabric & garment to
access actual demand .
• Bull whip effect shows increasing demand
variability in the upstream direction of supply
chain.
• Due to poor visibility of actual demand by
respective manufacturers in the supply chain,
each tries to build buffer against unforeseen
demand variability
 Push system :bull whip effect
• As each member superimposes the guess
on demand forwarded by its immediate
next organization, this amplifies the
demand variability in progressive manner
in the upstream direction of supply chain
 Pull system
• In timeframe 1970-1990, organizations were both
vertically and horizontally aligned
• The market demand became more volatile
• Small and repeat orders became common
• Long forecast based production resulted in huge stocks
piling up at each stage of supply chain . This being
further aggravated due to bull whip effect
• So the organizations needed to “fine tune their
production and distribution as per actual demand “
• “Produce only what customers need”
• No upstream should produce goods or services till the
customer downstream asks for it
 Pull system
• This led to reduction of unnecessary buffer stock
• Improvement in service level to supply what consumers
needed not what company makes
• Total cycle time from make to market is reduced to 60-90
days
• But its not possible to get the advantages of “economies
of scale” since batch production/ truckloads are hard to
achieve
• Another disadvantage is proliferation of product mix
• Increasing product diversity spawns significant
operational problems and reduces the responsiveness of
supply chain
 Pull system
• Example is Raymond Ltd.
• The consumers pull what they want from
the manufacturing base of Raymond
through dealer based distribution network.
The entire supply chain is vertically
integrated composite network of different
operations , produces only as per demand
of the customers
 Push system and pull system
• Push system is calling for regular preventive
maintenance
• Pull system: calling for maintenance only when
you cant fix something yourself
• If there aren't any consumers pulling the product
out of the front door (by picking up their orders),
then pushing the expenses in the back door is
certain to compromise at the bottom line
( “Memo to Management”- Lorne Tontegode,
Fabricare Canada May/ June 2007)
 Push system and pull system
• Pull-based Manufacturing
An essential part of any Build-To-Order strategy. Having
set up the framework for Flow, the next step is to only
produce what the customer needs. Pull means that no
one upstream should produce goods or services until the
customer downstream asks for it. Contrast this concept
to Push.
• Push-based Manufacturing
The production of items required by a given schedule
planned in advance. Push based manufacturing is
typically associated with producing products to
forecasted demand.
 Push-Pull/ Synchronous supply
chain
• In the initial stages of supply chain are
operated based on push system and final
stages are operated on pull system
• The interface between push based and
pull based stages is referred to as push-
pull boundary
• Eg. Morarjee Brembana Ltd. (leader in 100
% cotton high value shirt)
 Push-Pull/ Synchronous supply
chain
• Morarjee Brembana Ltd. (leader in 100 % cotton high value
shirt)
• This company out sources greige yarn based on forecast
and weaves and processes to produce qualities as per
actual demand of the customers.
• The supply chain is divided into two parts
• Push part is the part prior to weaving
• while pull part is the part that starts with weaving and is
based on actual customer need
• Since aggregate forecasts are more accurate
• Uncertainty in component demand is much smaller than
uncertainty in finished goods demand leading to safety
stock reduction
• Postponement or delayed differentiation
 PLM & CPFR
• PLM ( Product Life cycle Management)
The PLM systems is used by the best companies
to make the important supply chain activities
visible in real time
• CPFR Collaborative, Planning, Forecasting and
Replenishment model helps in weeding out the
effects of poor supply chain management..
• Textile Industry Supply Chain Model documents
the process steps across a complete set of
business functions in detail
 Sourcing Stimulator
• It’s a software tool developed through
retail and manufacturing models .
• It stimulates different supply chain
planning scenarios based on cost, lead
time, forecast accuracy and logistics.
• It can quantify revenue, gross margin,
inventory returns, lost sales, liquidation
loss and customer satisfaction