Basics of Push Pull Strategy :

Push pull strategy is a hybrid method of supply chain management which employs mixing the two
conventional supply chain models. Two conventional supply chain models of Push and Pull system are
used in conjunction. In a conventional push system, supply chain is based on supplier centric models.
Differentiated or final products are manufactured before observing the demand and are sent to retailers
for sale. On the other hand, conventional pull model is based on cutomer demand as it’s pivot. For
example manufacturing a customised car by a company on receiving order from a particular customer.
Here, the company does not make and keep the product but instead manufacture based on demand
obtained. Pull Strategies result in: Decreased inventory levels at retailers and manufacturers , Decreased
system variability ,Better response to changing markets but makes harder to leverage economies of scale
and doesn’t work in all cases

In the push pull hybrid model also known as the postponement strategy, the supply chain is a mix of the
two. Although, the final products are not manufactured upfront but components or a base model is
created before observing the demand. It can be understood as keeping the car with alll the technical
components of engine, chasis etc ready but manufacturing the final product( finished car with interiors)
after observing the demand or after getting the cutomer preference.

Application of Push-Pull strategy : Furniture stores

Here the postponement strategy works by company forecasting demand for various furniture product like
bed, sofas, dining table etc. It accordingly procures components needed for manufacture of the same. At
this stage the pull strategy stops and switches to Push strategy, weherein when a customer walks in, his
preferences are noted for a particular furniture product. For example if he has come to buy a bed,
preferences like, material (wood,iron ,steel ), length and width of the bed, number of legs to be used in the
bed, bed with storage or not can be few things that can be noted and accordingly the bed be
manuactured using the material already procured. What it does is it helps meet demand in a more
efficient way. Otherwise , the furniure company would have manufactured certain amount of bed of each
category and kept it as inventory adding to the inventory holding cost. Furthermore, it would have been
cumbersome to forecast demand of a particular bed type ( example bed with storage)

Company determines Procures raw Customer walks

a rough demand of material such as into the store
furniture product wood, iron, foams

Customer notes
Manufacturer preference of
makes final product furniture product
based on demand.

Example of Push-Pull System. Here, orange boxes are

push component and Blue boxes are the pull component.