"Push-Pull" refers to the dynamics between a supplier and a customer. In this discussion, suppliers and customers may be internal – within the organization – or external.
Suppliers "push" products to their customers by marketing; customers "pull" products from suppliers by placing orders.
A "push" strategy may be interactive, as in the case of a telephone call to a customer. It may be non-interactive, in the case of a commercial message through the media. The key point is that a "push" strategy markets finished goods from "warehouses".
A "pull" strategy waits for and responds to customer demand. This approach, if coupled with sufficiently quick production to meet customer demand, may require no pre-production and no warehoused inventory.
A prime example of a company using mixed – "hybrid" – strategy would be Dell Computer. Raw materials – components – are pre-ordered and warehoused. Despite their marketing "push", the computer is not assembled until an order is placed – so the production strategy is "pull". There is a boundary at the start of the assembly process.
A goal in lean manufacturing is to use a hybrid push-pull system. This means that:
For example: you manufacture three models of a widget. Half the cost of a widget is one component, where each model uses a different but expensive alloy. Every widget also uses some inexpensive, standard fasteners. You likely keep the fasteners in stock, but place orders for the expensive alloy component only when a customer orders it.
By Oskar Olofsson