Question

Describe the cycle and push/pull views of a supply chain.

Answer 1

The cycle view of a supply chain highlights the various cycles of the supply chain processes, each performed at the interface between two stages of the supply chain. Below are the different cycles in a supply chain -

1. Customer order cycle - This covers the processes which include Sales order entry, booking, fulfillment, shipping, invoice generation and revenue recognition.

2. Manufacturing cycle - This covers the processes which include production batch operation completion, material/component issue, resource consumption and product completion.

3. Inventory Replenishment cycle - This covers the processes which include inventory storage and movement, onhand inquiry and replenishment orders, inventory transactions etc.

4. Procurement cycle - This covers the processes which include placing purchase requisitions and orders for the buy items, receiving the quantity from suppliers, payables invoice generation and payments.

The Push/Pull view of a supply chain highlights how the supply chain processes are initiated i.e. if it is pull view, the fulfillment is initiated once the customer orders are placed whereas if it is a push view, the stock is held in the inventory in anticipation of customer orders.

In both the views, the fulfillment of the orders can be done through one or more of the below sources of supply -

1. Onhand inventory

2. Manufacturing for make items if there is internal manufacturing

3. Purchasing for buy items and contract manufacturing for make items if there is no internal manufacturing.