Push vs Pull Strategy
Definition
A push strategy produces and positions inventory based on forecasts before demand occurs, while a pull strategy triggers production or replenishment only in response to actual demand. Most real supply chains combine both around a push-pull boundary.
In Practice
Push systems work upstream from a forecast: MRP plans materials, factories build to stock, and product is pushed toward customers. Pull systems work backward from consumption: a sale or kanban signal triggers replenishment of exactly what was used. Push offers scale economies and availability; pull offers low inventory and automatic alignment with real demand.
The key design decision is where to place the push-pull boundary, also called the decoupling point. Upstream of it you run on forecasts and hold strategic stock; downstream you respond to orders. Commodity components might be pushed in bulk, while final assembly is pulled by customer orders.
Dell's classic model illustrates this: components were forecast-driven and stocked (push), but no computer was assembled until a customer ordered it (pull). A supermarket works similarly: distribution centers are stocked by forecast, while shelf replenishment is pulled by point-of-sale scans.
Related Calculators
Related Terms
Postponement is the strategy of delaying final product differentiation, such as configuration, packaging, or labeling, until customer demand is known. It lets companies hold flexible, generic inventory instead of guessing the mix of finished variants.
Just-in-Time (JIT)Just-in-Time is a production and replenishment approach in which materials arrive only as they are needed, minimizing inventory throughout the system. It originated in the Toyota Production System.
Demand ForecastingDemand forecasting is the practice of estimating future customer demand using historical data, statistical models, and market knowledge. It provides the quantitative foundation for demand planning, inventory targets, and capacity decisions.
Material Requirements Planning (MRP)Material Requirements Planning (MRP) is a calculation engine that translates a production schedule into time-phased requirements for every component and raw material, using bills of materials, inventory records, and lead times.