Pull-Push Strategy:

The business terms push and pull originated in the marketing and advertising world, but are also applicable in the world of electronic content and supply chain management. The push/pull relationship is that between a product or piece of information and who is moving it. A customer "pulls" things towards themselves, while a producer "pushes" things toward customers.
In a "push" system the consumer does not request the product to be developed; it is "pushed" to the end-user by promotion. An example of this is a perfume product. Women do not request to smell a fragrance they never smelled before; it is simply "pushed" to them, through the right advertisement.
• Applied to that portion of the supply chain where demand uncertainty is relatively small
• Production & distribution decisions are based on long term forecasts
• Based on past orders received from retailer’s warehouse (may lead to Bullwhip effect)
• Inability to meet changing demand patterns
• Large and variable production batches
• Unacceptable service levels
• Excessive inventories due to the need for large safety stocks
In a "pull" system the consumer requests the product and "pulls" it through the delivery channel. An example of this is the car manufacturing company Ford Australia. Ford Australia only produces cars when they have been ordered by the customers.
• Applied to that portion of the supply chain where demand uncertainty is high
• Production and distribution are demand driven
• No inventory, response to specific orders
• Point of sale (POS) data comes in handy when shared with supply chain partners
• Decrease in lead time
• Difficult to implement