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My Introspective

by Laurus Nobilis
My BrainCast

Supply Chain

Pull Logistics

Pull Logistics

 

 

Lean Concept gives the opportunity to the company to increase the service level, while reducing the cost. This is possible through strict implementation of lean tools.

 

Posted: Jan 2013


 

 

 

 

 

 

 

 

There are two supply principles in supply chain: Push and Pull. Push principle is based on massive production with the goal of utilizing the economy of large scale. Pull principle enables optimization of inventory and supply of product based on demand.

Push principle is very risky since the market may not respond on the extensive quantity, due to competition or change in consumer preference. Therefore, using of pull logistic at every step in the  supply chain should be the recommended

 

Ground Rules Of Pull Logistics

In a pull system, products are made based on following rules:

    • only if they are needed, based on market demand

    • in the exact quantity needed, based on sales forecast

    • as quickly as possible, in order to satisfy the need of the market ( holidays, seasonal demands, etc.

 

Benefits of Applying the Pull Principle

The pull principle in logistic has following benefits:

  • Reduced Inventory of Finished Good and Raw Materials

  • Increased Productivity

  • Transparency – problem exposure

  • Standard pull quantities – stabilized replenishment systems

  • Improved communication – less quality problems, quick feedback

  • Less material shortages – less downtime

 

The pull principle requires agility of the whole system. Since the product is delivered when it is required, the system should be very responsive for the volatility of demand. It is true that some stock outs may occur due to shortage of pull system, but the cost of write off in case of push-system inventory overstocking can be even higher.  

 

Read More on Lean Logistics:

Lean Principles in Logistics
Value/Waste Management in Logistics
Logistic Value Streams
Value Creating Step Flows
Pull Logistics
Perfection in Logistics
 

 

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