Push/Pull System

Push and Pull Systems
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Push and Pull Systems
A push system in logistics management entails the forecasting of the needs of customers to meet their demand. Companies predict the products to be purchased as well as their respective quantities. A disadvantage of this system is that the forecasts made are mostly inaccurate since it is difficult to predict sales that vary on an annual basis. Another drawback is that when a lot of the products are produced, the cost of their storage will increase. An advantage of the push system is that there is assurance of enough products to meet the customer needs. One example of this system is the Materials Requirements Planning (MRP). This is a computer system that uses information on operations, finances, and logistics to control ordering and scheduling (Warshan, 2015).
The pull system in logistics management starts with the orders from customers. This system ensures that the organization will only make products according to the orders placed by clients. Its advantage is that there is a reduction in the cost of storing and carrying goods since there is no excess inventory. The main disadvantage of this system is that it runs the risk of ordering dilemmas. Such dilemmas involve the possibility of failing to deliver in time which leads to customer dissatisfaction hence creating a bad reputation for the organization. An example of a pull system is the Just-in-time (JIT) system. The goal of this …