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Unit 9 Logistics

A push-pull strategy combines elements of push and pull supply chain strategies to optimize production, distribution, and inventory management. This helps reduce costs, improve flexibility, and allow businesses to respond quickly to changing market needs. A pull strategy involves producing and shipping goods based on customer orders to reduce inventory and costs, while a push strategy is based on anticipating customer demand to prepare goods in advance. An effective push-pull strategy requires analyzing market demand, planning production accordingly, implementing both push and pull approaches, and regularly reviewing performance to make adjustments that improve efficiency.

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384 views3 pages

Unit 9 Logistics

A push-pull strategy combines elements of push and pull supply chain strategies to optimize production, distribution, and inventory management. This helps reduce costs, improve flexibility, and allow businesses to respond quickly to changing market needs. A pull strategy involves producing and shipping goods based on customer orders to reduce inventory and costs, while a push strategy is based on anticipating customer demand to prepare goods in advance. An effective push-pull strategy requires analyzing market demand, planning production accordingly, implementing both push and pull approaches, and regularly reviewing performance to make adjustments that improve efficiency.

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K60 NGUYỄN THỊ LAN ANH
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Unit 9 Logistics- Pull and Push strategies

Push and Pull strategy is a supply chain management method based on the combination of two pull and
push strategies to optimize production, distribution and management processes. inventory management.
A push-pull strategy plays an important role in ensuring supply chain performance. This helps reduce
production costs, optimize inventory, improve flexibility, and respond quickly to changing market needs.
1. Pull strategy
Pull Strategy is a supply chain management method based on the actual needs of customers. Producing and
shipping goods are done based on orders from customers, which helps to reduce inventory and costs.
Advantages:
More flexibility in responding to customers' changing needs
Reduce inventory and associated costs
Increase competition in the market
Disadvantages
Delivery time may be longer due to waiting for orders from customers
It can be difficult to forecast production output

2. Push Strategy
Push Strategy is a supply chain management approach based on anticipating customer needs. Producing
and shipping goods is carried out based on this forecast, helping businesses to prepare the required quantity
of goods in advance.
Advantages:
- Ability to quickly respond to customer needs
- Help businesses forecast production output and adjust production efficiently
Disadvantages
- There is a risk of high inventories if the forecast is not accurate
- Production and warehouse management costs can be high
Steps to implement effective push and pull strategies
Market demand analysis: Collect and analyze data on market needs, trends, and competitors to identify
opportunities and threats.
Production planning: Based on the results of demand analysis, make production plans for products, with
the goal of optimizing inventory and production costs.
Implementation of a push strategy: Produce and ship goods based on demand forecasts, helping to
quickly respond to customer needs.
Implementation of a pull strategy: Produce and shipp goods based on actual orders from customers,
helping to reduce inventory and associated costs.
Performance review and adjustment: Monitor and evaluate the effectiveness of the Push/Pull strategy,
making necessary adjustments to improve supply chain management efficiency.
Applying new technologies and methods: Learn and apply new technologies and management methods
such as warehouse management systems (WMS), supply chain management systems (SCM), artificial
intelligence (AI) ) and Machine Learning to improve the effectiveness of the Push/Pull strategy.
4. Note of applying push-pull strategy
A push-pull strategy plays an important role in optimizing your supply chain management process.
However, to apply this strategy effectively, businesses need to be flexible in using strategies to maximize
efficiency
Use a Push Strategy
When businesses have the ability to forecast customer needs accurately and want to respond to customer
needs quickly.
When the product has a long life cycle, there is little volatility and demand is predictable.
When businesses want to take advantage of production scale, reduce the unit cost of the product.
Use a Pull Strategy
When customer needs are often changing and difficult to predict.
When a product has a short life cycle, there is a lot of volatility, and demand is difficult to predict.
When businesses want to focus on meeting the specific needs of each customer, creating flexibility in the
production and transportation of goods.
Combining Pull and Push strategies
- When businesses want to take advantage of both Push and Pull strategies to strike a balance between
business efficiency and meeting customer needs.
- When businesses want to enhance their competitiveness, reduce risks and optimize the supply chain
management process.
- When businesses want the flexibility to adjust production and shipping based on actual data and predict
customer needs.

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