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Critically review so called push and pull system of control for supply chains in the automotive sectore - Essay Example

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This study aims to underline the impact and suitability of push and pull systems of inventory management that have been so effectively implemented in automotive giants as Toyota. A combination of these two unique systems have removed unnecessary stockpiling of work-in-process…
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Critically review so called push and pull system of control for supply chains in the automotive sectore
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Download file to see previous pages It is pretty obvious that the production process will most certainly be geared towards producing those items that are in greater demand as any business entity tries to shorten the working capital cycle as much as possible so as to generate maximum amount of profit in the shortest possible time frame. But there is one other element that affects the overall profitability of any organisation, and that is the volume of capital employed. As any student of management accounting is aware of, the quantum of capital employed in plant and machinery is more or less uniform across an industry as all players generally opt for the latest technology so as to enjoy maximum levels of operating efficiency. So, there is not much to differentiate between the competitors in that regard. But the area where the leaders leave the stragglers behind is supply chain management and inventory control. If a proper and taut control over inventory is not maintained, the level of capital employed can never be brought down while keeping the operational efficiency intact.
These days the management gurus are looking beyond the narrow and immediate confines of inventory management and are looking at managing the supply chain as a whole. Supply chain attempts to view the whole production process as a seamless entity that begins with market research for correctly evaluating consumer demand and follows the flow of inputs and services through the production process right till the time when the finished product reaches the final consumer. Thus this is a wider concept that includes all the stakeholders; right from the supplier that supplies raw materials to the final consumer that buys the product to satisfy a particular need. In between of course lie the producer, the labour and the service inputs from the tertiary sector of the economy. A supply chain in ...Download file to see next pagesRead More
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