Push versus pull system - Ask a professional | BDC.ca

Push vs. a pull system

If my product is manufactured in Africa and imported to Canada, should production planning be done in accordance with customer consumption or demand, or in accordance with the product to be produced?

The location of your manufacturing facility should not much affect how you decide to design your production process.

The most familiar system of producing a product is the push system, also known as the "producer-centric" approach. In the push system, goods are manufactured in anticipation of customer orders. In other words, the producer will determine what to manufacture and in what quantities after judging true customer needs.

A pull system, also called a "customer-centric" system, on the other hand triggers production to manufacture only what the customer needs, when they need it. In this approach, production becomes a made-to-order process. A pull system starts with customers conveying their needs to producers through surveys, focus groups and brainstorming sessions. A pull system is meant to produce higher customer satisfaction, lower inventory, lower costs and a constantly changing product design to meet changing customers' needs.

Both systems have their advantages and disadvantages. The push system is more effective in dealing with fluctuating demand. Producers can store finished products in anticipation of demand, even though this incurs an inventory cost, or they can create a new demand by supplying products in the finished goods inventory, which means an overstocked sale.

In a push system, the producers control the pace of product development. Design changes are made infrequently, only when the current design becomes completely obsolete. But this system promotes the producer's control over the product and risks dissatisfying consumers.

On the other hand, the pull system forces producers to invest heavily into research and development to meet ever-changing customer requirements, which increases product cost. But customers are also more satisfied.

Recent research suggests using neither a pure push nor pure pull strategy, especially if you are producing multiple products. The pure pull system was initially designed for manufacturing environments producing repetitive products with stable demands, and requires at least a minimum inventory of each product. This may make it impractical for lines manufacturing a large variety of custom products.