Logistics - Supply Chain Management

ASSIGNMENT #1

1. Research Responsiveness Issue in Supply Chains (push, pull, and postponement strategies). Define each strategy and discuss the major differences between them. Name some companies that use each strategy. Do not just use textbook for you answers.

Supply Chain management is the process of flow from the production to the consumption and it also helps in customer satisfaction. In supply chain management responsiveness has the ability to react to customer request within a timeframe. The supply chain management helps the business to grow successfully with the three strategies as follows: push strategy, pull strategy and postponement strategy.

Push strategy: In push strategy, the product has been pushed to the customer where it brings the awareness of the existence of any product. Push strategies are also viable for building expensive services that are targeted to particular markets. Retailers can get inadequate quantities by creating a supply chain from the company. To accomplish this, organizations utilize effective advertisements to make the best with fast effect on customers.

Pull Strategy: In pull strategy, the demand for a product has been generated. This strategy is also called as make to stock. In this strategy, the awareness of a product will be raised before it is available for purchase.

Postponement Strategy: Postponement strategy is a process where the manufacturing or distribution of a product has been delayed until the receipt of customer is requested. This will help in the reduction of the anticipatory risk in supply chain. There are two types of postponement strategies. They are manufacturing postponement and geographic postponement.

Manufacturing postponement: The products are manufactured until the specification is known exactly. This is also called as late customization because the product customization may be delayed.

Geographic postponement: This is also called as logistics postponement. It has been facilitated to deliver precise order specification with accuracy. The company’s stock up the inventory in a few geographic locations and process the orders once the customer confirms it.

Push Strategy Pull Strategy Postponement Strategy

Focuses on resource allocation Focuses on responsiveness Focuses on the product value chain

The main objective is to minimize the cost The main objective is to maximize the service Maximize production flexibility

It is make to order It is make to stock It is delayed differentiation

Demand is uncertain Demand is certain Demand is certain

Execution initiate in anticipation of customer order Execution initiate in response to customer order Execution initiates only after customer purchase confirms.

The