My last blog described the “on-demand” nature of distribution inventories. It was stated that what customers care about is product availability, low prices, and delivery in the shortest time possible, if not immediately. In contrast, the cares of distributors and retailers center on creating supply chains that provide the highest supply chain surplus value (defined as the difference between the revenues generated from the customer and the overall cost across the supply chain). Growing supply chain profitability, however, is no easy task: it requires the development of flexible strategies and adaptable supply channel operations.

My last blog introduced the issue of “push” and “pull” inventory management in a multiechelon channel environment. At first glance, managing distribution and retail inventories seems to be a breeze compared to the complexities of managing manufacturing inventories. After all, isn’t it just finished goods being moved around with very short lead times (literally the time it takes for picking, packing, transportation, receiving, and put-away) measured in days, if not hours?

Over the past months a discussion has raged on the APICS instructor community about the meaning and application of “push” and “pull” methods of inventory replenishment in a multiechelon distribution environment. This blog represent the opening discussion on settling this controversy.