PUSH PULL
HISTORY OF PUSH AND PULL INVENTORY PHILLOSOPHIES
American manufacturers historically used push inventory control methods for the majority of time from the start of the Cold War up to the Reagan administration. During the mid-1970s Japanese manufacturers starting using a concept known as kanban replenishment. The word "kanban" means "signal" in English. This shift started what we now call the lean manufacturing era. The concept of lean manufacturing involves reducing waste in an organization. Push systems inherently increase waste and decrease resources. Pull systems inherently decrease waste and fully utilize resources. Today many companies around the world utilize pull systems to increase efficiency and decrease operating costs.
PUSH INVENTORY PHILLOSOPHY
With a push strategy, a producer will form relationships with retailers and distributors to bring a product to consumers.
For example: Motorola may use a push strategy to make arrangements with large mobile phone providers, such as Sprint, Verizon and AT&T, who can advertise phones directly to consumers. Businesses can promote products to wholesalers and vendors through trade shows, contacting local retailers and providing attractive packaging and point of sale displays to convince consumers to buy.
This philosophy forecasts demand by looking at historical sales or demand data. The company then uses that forecast to drive production. The push system concept centers on expected demand. In an environment that uses this system, a Manufacturing Resource Planning (MRP) tool schedules production to anticipate future needs.
Push systems typically create larger-than-required replenishment quantities. This happens because push systems use production efficiencies in manufacturing. Typically, production machines do not reach peak efficiency when they put out small batches, so companies produce larger batches to maximize the machine’s efficiency. This creates extra inventory, increases labor costs
American manufacturers historically used push inventory control methods for the majority of time from the start of the Cold War up to the Reagan administration. During the mid-1970s Japanese manufacturers starting using a concept known as kanban replenishment. The word "kanban" means "signal" in English. This shift started what we now call the lean manufacturing era. The concept of lean manufacturing involves reducing waste in an organization. Push systems inherently increase waste and decrease resources. Pull systems inherently decrease waste and fully utilize resources. Today many companies around the world utilize pull systems to increase efficiency and decrease operating costs.
PUSH INVENTORY PHILLOSOPHY
With a push strategy, a producer will form relationships with retailers and distributors to bring a product to consumers.
For example: Motorola may use a push strategy to make arrangements with large mobile phone providers, such as Sprint, Verizon and AT&T, who can advertise phones directly to consumers. Businesses can promote products to wholesalers and vendors through trade shows, contacting local retailers and providing attractive packaging and point of sale displays to convince consumers to buy.
This philosophy forecasts demand by looking at historical sales or demand data. The company then uses that forecast to drive production. The push system concept centers on expected demand. In an environment that uses this system, a Manufacturing Resource Planning (MRP) tool schedules production to anticipate future needs.
Push systems typically create larger-than-required replenishment quantities. This happens because push systems use production efficiencies in manufacturing. Typically, production machines do not reach peak efficiency when they put out small batches, so companies produce larger batches to maximize the machine’s efficiency. This creates extra inventory, increases labor costs