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Push system is usually aimed at longer periods of time and involves customer needs forecasting. Retailers provide information about the quantity and type of products needed, and these orders are placed for comparatively long period of time. The number of inventory held is rather big. This approach allows customers order more, but not if the customer needs change. Conversely, pull system helps decreasing the number of inventory at hand and react on customer needs much quicker by providing them those products that are needed in less quantity but with more urgency. At the same time, pull system does not allow forecasting and making generalizations about customer needs in the future. For this reason, as mentioned by Simchi, the companies apply a hybrid approach in the form of push-pull supply chain paradigm.

Supply chain integration is needed in order to ensure that the customer needs are met by the production process. Customer needs satisfaction must be completed in terms of product availability and quality. Therefore, the goal of supply chain management is to integrate all the elements of supply chain into a system that is well-planned and organized. Such system allows addressing the most important issues promptly and avoiding delays with product distribution that affect the end consumer.

The application of distribution strategies is influenced by the type of product, its main qualities and the customer needs in terms of this product. For example, the food products such as milk and eggs are usually supplied directly to retailers as they require big parties to be shipped at once. At the same time, due to goods perishability, milk and eggs are only stored for a very short period of time. Direct warehousing involves all the types of goods that are usually not perishable – household products, electronics, cars etc. Cross-docking is the result of a combination of direct warehousing and direct shipment. This type of strategy is only possible for the global retailers such as Wal-Mart or Carrefour.

Code: Sample20

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