16 May DISCUSS THE ADVANTAGES AND DISADVANTAGES OF A PUSH SYSTEM AND A PULL SYSTEM
Please respond to both students separately with a minimum of 100 words for each.
Original Class Post:
Discuss the advantages and disadvantages of a push system and a pull system. Give specific product examples as part of your discussion that are not included in the readings for this week.
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Student Fred
There is always advantages to any supply strategy that is used. The pull system is a strategy that can be used to meet customer needs without having to maintain stock on hand, therefore reducing overhead costs. A pull system is more along the lines of the make to order system. The push strategy is more along the lines of a make to stock system. The push system is a strategy companies will use in order to meet customer demands quickly. Being able to meet demands quickly, will increase sales and volume, since most people in society are wanting instant gratification when wanting something, and do not want to wait any length of time.
There is also disadvantages to supply strategies that are used. When using a push, make to stock system, you have more overhead costs than the pull, make to order, system. Companies will have a transportation costs, as well as a storage costs, when making items readily available on store shelves to the customer. The pull system relies on the production facility being able to keep up with the demand placed on the system by customers. The disadvantage to the pull system is customers having to wait longer for their product they are wanting. Therefore, there is a possibility of customers going elsewhere to buy their product based on the longer wait time.
Many companies or organizations use a hybrid system of the push-pull system. They do this by having stock on hand in a limited amount, and rely on the customer pull the product off the shelf, and drive the requirement to have more stock pushed to the store. The hybrid system is used a lot within the computer market. With computers coming with so many options, and varied hardware, stores will carry a generic model of computer, hoping to sell larger quantities, and have customers order the more custom varieties.
Student Derek
This week we are talking about the advantages of the push as well as the pull system or as our last forum could describe them as the made to stock and made to order. We know that the advantages for a push system is that with a forecasted value for inventory there is not really any crazy rushes on needing to make products as the forecasted value is being made and inventoried. While this gives a nice and calm production rate, it also brings the disadvantage of storing that amount of inventory until sold. With today’s companies, inventory is seen as a negative cost due to the handling and storage price of those products. For the pull system or made to order, the production rate can be intense at times with the very limited amount of parts being ordered to make a product. If something is broken along the manufacturing process, another part has to be ordered and the line is backed up. This process needs to have a very high precision of management in order to handle that chaos that can occur. While the advantages of this system show that there is no need for inventory costs due to not having an inventory. While this keeps costs down for companies, it can be a burden on the customer if they are not in the waiting mood and decide to go with another company. We can think of a push system as a product that does not vary much in customer demand, and can be made without needing precision such as nuts and bolts. For the pull system, this occurs with electronic communication and when things need customizing such as automobiles. A push and pull system is a hybrid that is very common with companies that used to forecast with the push system, but want to lean the process out and are able to customize products during the pull portion of the product line. Some newer model cars are able to be on a push system, and the move to the pull for different engine and interior models.
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