Push-Pull Supply Chains:

Starting from 90s, apparel corporations all over the world have experienced increasing national and international competition and have initiated horizontal alignment with leaner structure to better address dynamic demand situation in a capacity surplus environment. (9). The shift has taken place in the marketplace from mass products to customized products. In distribution channel, giant retailers like Wall Mart, K-Mart exercise even more power to the supply chain (10).

As mentioned in previous sections, the disadvantages of Push and Pull supply chains along with changes in global business landscape have forced companies to look for a new supply chain strategy that takes advantage of the best of both world. This results into a hybrid of the two systems Push-Pull supply chain system.

Push-Pull is also termed as synchronous supply chain. In this strategy, the initial stages of the supply chain are operated based on Push system, and the final stages are operated on Pull strategy. The interface between the Push-based stages and the Pull-based stages is referred as the Push-Pull boundary.

Consider the case of Morarjee Brembana Ltd., the leader in 100 percent cotton high-value shirting fabric manufacturer, which out-sources greige yarn based on forecast, and weaves and processes to produce qualities as per actual demand of customers. This implies that supply chain of Morarjee Brembana is divided into two parts. The Push part is the part of the Morarjee supply chain prior to weaving, while the Pull part is the part of the supply chain that starts with weaving and is based on actual customer demand. Indeed, demand for yarn is an aggregation of demand of all finished products that use this component. Since aggregate forecasts are more accurate, uncertainty in component demand is much smaller than uncertainty in finished goods demand. This, of course, leads to safety stock reduction.

Postponement, or delayed differentiation, in product design is also an excellent example of a Push-Pull strategy. In postponement, the firm designs the product and the manufacturing process so that actual product differentiation can be deferred as much as possible down the pipeline when actual demand is known. Thus, the portion of the supply chain prior to product differentiation is typically based on push strategy, and the portion of the supply chain starting from the time of differentiation is based on Pull system. Postponement can be done based on time, place and form.

Conclusion:

Following insights are arrived at from the above discussions:

• Design of supply chain configuration depends on clock-speed of organization. Clock-speed of organization is the speed with which the product-portfolio and process change in response to market demand. So, organization having low clock-speed, i.e. with relatively stable demand may have push oriented supply chain. On the other hand, a high clock-speed organization with variable market demand may have pull oriented supply chain.

• In the Push portion of a Push-Pull supply chain strategy the focus is on cost while in the Pull portion of the strategy, the focus is on service levels.

• In a Push-Pull strategy, the Push part is applied to the portion of the supply chain where long-term forecasts have small uncertainty and variability. On the other hand, the Pull part is applied to the portion of the supply chain where uncertainty and variability are high and therefore decisions are made only in response to real demand.

• In a Push-Pull supply chain, inventory is minimized as it is designed to eliminate the safety stock by make-to-order and long cycle-time is reduced by pre-arranging/ pre-manufacturing part of the supply.

• It is found that management of apparel supply chain moves from push to pull and finally to synchronous system. However, all three kinds of supply chain management co-exist in apparel industry as appropriate supply chain strategy depends on the industry, the company, and individual products. The higher the uncertainty in customer demand, the better to manage that part through Pull strategy