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Push Inventory Control: Implementing a push system requires a company to rely heavily upon long-term projections to meet consumer demand without oversupplying or undersupplying. After forecasting what the demand will be for a given period, a company will order accordingly and push the products to consumers. Companies in stable and highly predictable industries tend to thrive with this strategy more so than companies in less-stable industries with lower predictability
Pull Inventory Control: This differs from a push system because it relies upon placing smaller, frequent orders. Rather than trying to make long-term projections, a pull system is more reactive and adapts to consumer-buying trends as they unfold. Many companies that implement this form of inventory control monitor statistics in real time to make the most educated decisions when ordering supplies.
Pull syttem is the best option to be implemented in production. But before going from push to pull, there are few things to be kept in mind i.e,
1. Is your manufacturing line flexible as per customer demand?
2.Do you have a consistent customer demand?
3. Do you receive your raw material on time?
Well if the answer to any question is no, before implementing pull you should try and stablise your production.
I would recommend you to read a book on Toyota Production System by Taichi Ohno and this will surely answer all your questions.
I hope I helped
Push System
The push system of inventory control involves forecasting inventory needs to meet customer demand. Companies must predict which products customers will purchase along with determining what quantity of goods will be purchased. The company will in turn produce enough product to meet the forecast demand and sell, or push, the goods to the consumer. Disadvantages of the push inventory control system are that forecasts are often inaccurate as sales can be unpredictable and vary from one year to the next. Another problem with push inventory control systems is that if too much product is left in inventory. This increases the company's costs for storing these goods. An advantage to the push system is that the company is fairly assured it will have enough product on hand to complete customer orders, preventing the inability to meet customer demand for the product.
An example of a push system is Materials Requirements Planning, or MRP. MRP combines the calculations for financial, operations and logistics planning. It is a computer-based information system which controls scheduling and ordering. It's purpose is to make sure raw goods and materials needed for production are available when they are needed
Pull System
The pull inventory control system begins with a customer's order. With this strategy, companies only make enough product to fulfill customer's orders. One advantage to the system is that there will be no excess of inventory that needs to be stored, thus reducing inventory levels and the cost of carrying and storing goods. However, one major disadvantage to the pull system is that it is highly possible to run into ordering dilemmas, such as a supplier not being able to get a shipment out on time. This leaves the company unable to fulfill the order and contributes to customer dissatisfaction.
An example of a pull inventory control system is the just-in-time, or JIT system. The goal is to keep inventory levels to a minimum by only having enough inventory, not more or less, to meet customer demand. The JIT system eliminates waste by reducing the amount of storage space needed for inventory and the costs of storing goods.
Push-Pull System
Some companies have come up with a strategy they call the push-pull inventory control system, which combines the best of both the push and pull strategies. Push-pull is also known as lean inventory strategy. It demands a more accurate forecast of sales and adjusts inventory levels based upon actual sale of goods. The goal is stabilization of the supply chain and the reduction of product shortages which can cause customers to go elsewhere to make their purchases. With the push-pull inventory control system, planners use sophisticated systems to develop guidelines for addressing short - and long-term production needs.
