Supply Chain Glossary

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Demand Pull


Source: Procurement Glossary
Author: Paul Rogers
Institute: CIPS - UK

Courtesy of


 

Demand-pull describes a supply chain where the trigger for supply is customer demand.  As an example, at the start of a new academic year, a university bookshop stocking a popular text places a requisition card halfway down the pile.  As the texts are purchased the requisition card is exposed and the triggers the buyer at the bookshop to raise an order for more.  The logic being that the order will be received, processed and delivered before the last text in stock at the bookshop is sold.

This contrasts with ‘supply-push’, which would see the publisher automatically shipping a set number of the same text every week to the bookshop irrespective of customer demand.  Should the book no longer be a required text and demand subsequently halves, a supply-push scenario would see the bookshop receiving too many copies for the revised level of demand.  However, the demand-pull model of replenishment would ensure a slowing of the re-order process and avoid the potential for being over-stocked.  See also Lead Time.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




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