From Push to Pull Logistics

Freight distribution is within a paradigm shift between "manufacture-to-supply" (inventory-based logistics or "push" logistics) to "manufacture-to-order" (replenishment-based logistics or "pull" logistics). The paradigm is shifting from maintaining inventories aimed at approximately satisfying the demand to a comprehensive data collection system insuring, mainly through on-demand transport, that supply matches with demand. This trend is strengthened by logistics, namely a better integration between transport modes and inventory control. Of particular relevance to the logistics industry has been the emergence of major coordinators and integrators (third and fourth-party logistics providers) that have taken the task of improving segments of the supply chain. While a push logistics system involves a limited level of integration between suppliers, manufacturers and distributors, a pull logistics system tries to achieve a higher level of efficiency through integration. Freight flows between components of the supply chain tend to be more frequent, in smaller batches and subject to tight time constraints. In addition, the sharing of demand dependant data (such as sales) helps better synchronize supply with demand. Reverse logistics also tends to be better integrated to achieve a higher level of customer service as well as to promote environmental strategies such as recycling.