Question

Distinguish between a push-based and pull-based model of supply chain management and explain how contemporary supply chain management systems facilitate a pull-based model.

A) A push-based model relies on forecasts and production schedules, while a pull-based model responds to customer demand.
B) A push-based model minimizes inventory costs, while a pull-based model focuses on maximizing production efficiency.
C) A push-based model is customer-centric, while a pull-based model is more supplier-centric.
D) A push-based model is suitable for fast-changing markets, while a pull-based model is better for stable demand environments.

Answer 1

A push-based model relies on forecasts and production schedules, while a pull-based model responds to customer demand. Contemporary supply chain management systems enable companies to implement a pull-based model by using technology and real-time data.

Step-by-step explanation:

A push-based model of supply chain management relies on forecasts and production schedules to determine the quantity and timing of production. It involves producing goods based on anticipated demand and then pushing them through the supply chain. On the other hand, a pull-based model responds to customer demand by producing goods only when an order is received, leading to a more customer-centric approach.

Contemporary supply chain management systems facilitate a pull-based model by using technology and real-time data to track customer demand and inventory levels. These systems enable companies to respond quickly to changes in demand, reduce lead times, and manage inventory more efficiently. For example, companies can use point-of-sale data and demand forecasting algorithms to trigger production and replenishment automatically based on actual customer demand.