Question

“Demand-pull supply chain systems have made traditional push systems obsolete”.

Critically discuss this statement. Draw on cases used in the course to support your arguments.

Answer 1

Answer 1) Demand pull and demand push are two major supply chain management tools which are used on daily basis. These two are said to be the determinants of supply and demand. Demand push is when the manufacturer of a particular product pushes that products to the channel members that is the distributors, the wholesalers, the retailers and eventual in ends up upon selling to the customer. Demand push is creating demand of a product in the market through pushing it in the market, doing promotions, launching offers etc perfect example of this is newly launched product in this the demand is pushed to channel members to sell these goods. Whereas demand pull is said to be the strategy of the era, in this the customer himself/herself demands for the product in this the channel the manufacture, wholesaler, distributor, retailers ask for product to deliver it to the customer. In this the demand is created from the customer side. For example new Iphone launched at lesser price. Best example is when a car company wants to create demand push strategy the company starts giving profit margins to channel members and discount offers to customer this creates demand and when company launches a new car and the car is in demand that too with no offers this is demand pull supply chain.

So now talking about that demand pull has made demand push obsolete is very correct because in today’s time, companies make the best products with best quality and the launch it in the market, Hyundai launched car named Venue in India and it’s been more than 1 year no discount policy is given on the car whereas rest old cars are having discount policy. Same happens with new Iphone whenever a new Iphone is released the demand is pulled because it’s the new exclusive product and even for the old products as well because the price is lowered down and customers demands at that price. Why and how demand pull is created? The end consumer of the product is a customer so is the customer will get value of the product in equal distribution to the amount which he/she is paying so in such situation customers will demand the product and this will make demand pull supply chain. So the trend of demand push is going back as companies are now standardizing their product, making it better this results is self pull of demand so as demand pull supply chain.