In supply chain management, understanding how processes flow is essential to optimizing efficiency and meeting customer demands. The process view of a supply chain is performed in two primary ways: the Cycle View and the Push/Pull View. Each approach offers a different perspective on how supply chain activities are structured and executed.
Cycle View of Supply Chain
The Cycle View of the supply chain divides the entire supply chain process into a series of cycles, with each cycle involving interactions between two successive supply chain stages. This view is particularly useful for operational and tactical decision-making, as it provides a structured breakdown of processes.
Four Cycles in the Supply Chain
- Customer Order Cycle: The process starts when a customer places an order. This includes order entry, fulfillment, and delivery.
- Example: A customer orders a custom-made dress from a boutique. The order is received, the dress is stitched, and it is delivered to the customer.
- Replenishment Cycle: Retailers or distributors replenish stock from manufacturers or wholesalers.
- Example: A fashion retailer orders a fresh batch of seasonal clothing from a wholesaler to restock its inventory.
- Manufacturing Cycle: This involves production planning, scheduling, and manufacturing based on demand forecasts or actual orders.
- Example: A clothing brand forecasts demand for summer dresses and produces them in bulk before the season begins.
- Procurement Cycle: The process of sourcing and purchasing raw materials from suppliers.
- Example: A fashion designer procures high-quality silk and embroidery materials to create a new collection.
Push/Pull View of Supply Chain
The Push/Pull View classifies supply chain processes based on demand certainty. This perspective helps in making strategic decisions regarding inventory and production planning.
Push Process (Speculative)
- Processes are executed based on anticipated demand (forecast-driven).
- Inventory is produced and stored before actual customer demand is known.
- Used in industries with stable demand patterns.
- Fashion Example: A fast-fashion brand like Zara produces trendy outfits in bulk based on seasonal trends and distributes them to stores worldwide.
Pull Process (Reactive)
- Processes are triggered by actual customer demand (order-driven).
- Products are made or assembled only after an order is received.
- Used in industries with high customization needs.
- Fashion Example: A couture designer creates a custom wedding dress only after a client places an order, ensuring a perfect fit and unique design.
Push/Pull Boundary
Many businesses operate with a hybrid model, where some parts of the supply chain follow the push model, while others use the pull approach.
- Example: A fashion brand may mass-produce basic T-shirts (push) but manufacture limited-edition designer jackets only after receiving orders (pull).
Comparison: Cycle View vs. Push/Pull View
| Feature | Cycle View | Push/Pull View |
|---|---|---|
| Focus | Operational process cycles | Demand-driven approach |
| Decision Level | Tactical/Operational | Strategic |
| Key Concept | Sequential interactions | Demand uncertainty |
| Industry Example | Fashion, Retail | Fashion, Couture |
Summary in Five Lines
- The Cycle View divides the supply chain into structured cycles like Customer Order, Replenishment, Manufacturing, and Procurement.
- The Push View relies on forecasted demand, with brands producing fashion items in advance and stocking them before sales.
- The Pull View responds to actual demand, where production starts only after receiving customer orders, like in couture fashion.
- Many fashion brands use a hybrid model, mass-producing basics (push) while crafting exclusive designs on demand (pull).
- The Cycle View helps with operational planning, while the Push/Pull View guides strategic decisions for efficiency and responsiveness.
Conclusion
Both Cycle View and Push/Pull View help in structuring supply chain management effectively. The Cycle View is more focused on operational execution and interactions, whereas the Push/Pull View helps in strategic decision-making based on demand. Businesses often integrate both views to enhance supply chain responsiveness and efficiency.
