Glossary
Pull or Pull-Through Distribution
Tags: Glossary
Supply-chain action initiated by the customer. Traditionally, the supply chain was pushed: manufacturers produced goods and 'pushed' them through the supply chain, while the customer had no control. In a pull environment, a customer's purchase sends replenishment information back through the supply chain, from retailer to distributor to manufacturer, so goods are 'pulled' through the supply chain.
What is Pull or Pull-Through Distribution?
Pull or Pull-Through Distribution
In the world of logistics, the concept of pull or pull-through distribution refers to a supply-chain action that is initiated by the customer. Traditionally, the supply chain operated on a push model, where manufacturers produced goods and "pushed" them through the supply chain without much consideration for customer demand or control. However, in a pull environment, the dynamics of the supply chain are reversed.
In a pull environment, the customer's purchase becomes the trigger for replenishment activities throughout the supply chain. When a customer makes a purchase, this information is sent back through the supply chain, starting from the retailer to the distributor and ultimately reaching the manufacturer. This process allows goods to be "pulled" through the supply chain based on actual customer demand.
The shift from a push to a pull environment has been driven by the desire to improve customer satisfaction, reduce inventory costs, and increase overall supply chain efficiency. By aligning production and distribution activities with actual customer demand, companies can avoid overproduction and reduce the risk of excess inventory. This, in turn, leads to cost savings and improved profitability.
One of the key advantages of a pull distribution system is its ability to respond quickly to changes in customer demand. Since the supply chain is driven by actual customer orders, companies can adjust their production and distribution activities in real-time. This flexibility allows for better inventory management, reduced lead times, and improved customer service levels.
Implementing a pull distribution system requires close collaboration and information sharing among all supply chain partners. Retailers need to communicate sales data to distributors, who in turn need to share this information with manufacturers. This flow of information enables each participant in the supply chain to make informed decisions and respond effectively to customer demand.
In conclusion, pull or pull-through distribution represents a shift in the traditional supply chain model, where customer purchases drive replenishment activities throughout the supply chain. By adopting a pull environment, companies can improve customer satisfaction, reduce inventory costs, and increase overall supply chain efficiency. This approach allows for better responsiveness to customer demand and enables companies to stay competitive in today's dynamic business landscape.