‘Pull Distribution’ refers to the supply chain strategy that focuses on customer demand as a governing force for operations. It is a ‘replenish when consumed’ model which helps maintain the correct amount of inventory for all materials (finished goods, raw materials etc) in the warehouses.
Whenever there is consumption of goods from the predefined buffers, an order is generated in the shop floor to replenish the stocks. This ensures reliable availability in the market and also eliminates excess and unnecessary inventory throughout the supply chain channel.
Although materials flow from the supplier to the manufacturer in both the models, the focus on flow of information in the Pull type is upstream – from the customer to the manufacturer rather than the manufacturer to the customer in the Pull type.
A manufacturer/distributor has two main questions in mind while deciding on the stock to be kept at each location. These are:
• How much should be kept upstream the supply chain?
• How much should be kept downstream the supply chain?
The natural tendency is to keep the stock as…
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