Logistics Management, Pull and Push Inventory, Stock
The world of business undergoes dynamic changes frequently. These changes occur because of the need for business to grow and survive the competition. Large business companies use various methods to sell their stock. They use various supply chains which will suit them and their customers best without making any losses from excess stock or low stock demand.
In response to various supply requirements, the need for logistic inventory was necessary. Logistic inventory involves the use of technology to run the supply chain. This involves the use of computers as well as the internet to manage the supply chain. A perfect supply chain requires speed, accuracy and visibility. Therefore, the use of logistical management helps companies to achieve good supply chains. The use of computers reduces the production costs and it helps companies have a clear supply chain, which can be reviewed in case of any problem in the supply chain.
There are various ways used in today's business world to enhance good sell of a company's stock. For instance, there is the push and pull inventory logic. Push type is where stock made is not in regards to the actual demand. On the other hand, pull type is where stock made is triggered by actual demand. Recent technology has made it easy to computerize the two supply chains; one can shift from push type to pull type (Kotabe 2012).
[...] Advantages of Push Inventory Logic There are various advantages and disadvantages of push inventory logic. It is also referred to as “make to stock” MTS. The major advantage of the push inventory logic is that the manufactures meet the demand of the customers. Push inventory logic makes companies move the lower inventory in the supply chain. This gives the companies an advantage in terms of inventory possession. The pull inventory logic also helps companies make future predictions. Furthermore, the system has an advantage because it is adjustable. [...]
[...] Decision-making for supply chain integration: Supply chain integration. London: Springer. Ghiani, G., Laporte, G., & Musmanno, R. (2004). Introduction to logistics systems planning and control. Chichester, West Sussex: J. Wiley. Taylor, D. A. (2003). Supply chains: A manager's guide. Harlow: Pearson Professional Education. [...]
[...] This is because they do not benefit from economies of scale as much as those using the push inventory logic. Companies using this system also undergo a hard monitoring process tracking the level of inventories. The pull strategy can also lead to delayed shipping to the customers thus reducing the customer's satisfaction (Ghiani 2004). A Successful Real-World Case Other than theory success, the use of these logistics has been successful practically as well. According to various shown by some companies, the use of these logistics has helped to boost the success of various companies. [...]
[...] If these logics are used together, the cost of production reduces and profit margin increases substantially. The pull and push inventory logics both work individually as well depending on the company's goal. These logics are different because they determine the movement the inventory in the supply chain. Since the inventory determines the use of capital, companies should ensure they monitor the inventory movements keenly. Companies should use the proper inventory logic in both local and global ventures to ensure desirable profits are achieved. [...]
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