by Process view of the supply chain looks at the supply chain as a set of processes that move products, information, and funds across different stages. The cycle view is one important way to understand these processes. It divides the supply chain into cycles, where each cycle occurs at the interface between two successive stages of the supply chain. This view helps in identifying responsibilities, managing operations efficiently, and measuring performance at each stage.
Meaning of Cycle View
Cycle view of the supply chain represents supply chain activities as a series of cycles involving customers, retailers, distributors, manufacturers, and suppliers. Each cycle includes processes related to order placement, order fulfillment, and information flow. The focus is on coordination between two adjacent stages rather than the entire supply chain at once
- Customer Order Cycle
The customer order cycle exists between the customer and the retailer. It begins when a customer places an order and ends when the product is delivered and payment is completed.
This cycle includes activities such as order entry, order processing, picking, packing, shipping, and delivery. Efficient management of this cycle directly influences customer satisfaction, as it determines delivery speed, order accuracy, and service quality. Retailers aim to minimize lead time and errors to improve customer experience.
- Replenishment Cycle
The replenishment cycle occurs between the retailer and the distributor or wholesaler. Its purpose is to restock inventory at retail locations based on sales and demand patterns.
In this cycle, retailers track inventory levels and place replenishment orders with distributors. Distributors manage warehouse operations, inventory storage, and transportation to fulfill these orders. Proper replenishment planning helps reduce stock-outs, prevent overstocking, and maintain smooth product availability.
- Manufacturing Cycle
Manufacturing cycle operates between the distributor and the manufacturer. It involves the production of goods to meet replenishment or forecasted demand.
Activities in this cycle include production planning, scheduling, manufacturing operations, quality control, and packaging. The manufacturing cycle focuses on balancing production efficiency with responsiveness. Effective coordination ensures that manufacturers produce the right quantity at the right time while controlling costs and maintaining quality standards.
- Procurement Cycle
Procurement cycle exists between the manufacturer and suppliers. It deals with sourcing raw materials, components, or services required for production.
This cycle includes supplier selection, purchase order placement, inbound transportation, inspection, and payment. Efficient procurement ensures uninterrupted production, cost control, and strong supplier relationships. Long-term contracts and strategic partnerships often enhance procurement efficiency.
Importance of Cycle View
- Clear Definition of Roles and Responsibilities
The cycle view clearly defines the roles and responsibilities of each supply chain participant such as customers, retailers, distributors, manufacturers, and suppliers. By identifying what activities are performed in each cycle, managers can avoid role confusion and duplication of work. This clarity ensures accountability at every stage and helps organizations assign tasks efficiently, leading to smoother coordination and better operational control across the supply chain.
- Improved Operational Coordination
By dividing the supply chain into customer order, replenishment, manufacturing, and procurement cycles, the cycle view enhances coordination between adjacent stages. Each cycle focuses on the interaction between two partners, making communication more structured and effective. Improved coordination reduces delays, misunderstandings, and inefficiencies, ensuring that materials, information, and funds flow smoothly from one stage to the next.
- Better Process Visibility
The cycle view improves visibility into supply chain processes by clearly outlining activities involved in each cycle. Managers can easily track where delays, bottlenecks, or inefficiencies occur. Enhanced visibility helps organizations monitor performance, identify weak areas, and take corrective action. This transparency supports better decision-making and allows firms to respond quickly to operational problems.
- Effective Performance Measurement
One of the major advantages of the cycle view is its usefulness in performance measurement. Each cycle can be evaluated independently using key performance indicators such as lead time, order accuracy, inventory levels, and service quality. Measuring performance cycle-wise helps managers pinpoint problem areas and assess improvement initiatives more accurately, leading to continuous enhancement of supply chain efficiency.
- Cost Control and Efficiency Improvement
The cycle view helps organizations identify cost drivers within each cycle, such as transportation costs, inventory holding costs, or procurement expenses. By analyzing costs cycle by cycle, firms can implement targeted cost-reduction strategies. Improved efficiency in individual cycles contributes to overall cost savings while maintaining service levels, making the supply chain more competitive and sustainable.
- Enhanced Customer Satisfaction
Since the customer order cycle is a key component of the cycle view, it places strong emphasis on fulfilling customer requirements effectively. Efficient management of this cycle ensures timely delivery, accurate order fulfillment, and reliable service. When customer-facing processes are optimized, customer satisfaction increases, leading to repeat purchases, brand loyalty, and a stronger market position.
- Support for Process Improvement and Redesign
The cycle view provides a structured framework for analyzing and redesigning supply chain processes. Managers can focus on improving specific cycles without disrupting the entire supply chain. This approach supports continuous improvement initiatives such as lean management and process reengineering, helping organizations enhance productivity, reduce waste, and improve overall performance.
- Foundation for Supply Chain Integration
The cycle view serves as a foundation for integrating supply chain activities across organizations. By understanding how each cycle interacts with others, firms can align processes, share information, and collaborate more effectively with partners. This integration leads to better planning, reduced uncertainties, and improved responsiveness, strengthening the overall supply chain network.
Process View of Supply Chain – Push–Pull View
Push–pull view of the supply chain focuses on how demand information influences production and distribution decisions. It divides supply chain processes into push processes, which are forecast-driven, and pull processes, which are demand-driven. This view helps organizations balance efficiency and responsiveness in supply chain operations.
Meaning of Push–Pull View
Push–pull view classifies supply chain activities based on whether they are initiated in anticipation of demand or in response to actual customer orders. The key objective is to decide which processes should rely on forecasts and which should respond directly to customer demand.
Push-Based Supply Chain
Push-based supply chain, decisions regarding production, procurement, and distribution are based on demand forecasts. Products are manufactured in advance and pushed downstream toward customers.
This approach is suitable when demand is stable and predictable. Push systems allow firms to benefit from economies of scale in production and transportation. However, inaccurate forecasts can lead to excess inventory, high holding costs, and product obsolescence, making push systems risky in volatile markets.
Pull-Based Supply Chain
Pull-based supply chain, production and distribution activities are triggered by actual customer demand. Products are made or delivered only after an order is received.
Pull systems reduce inventory levels, minimize waste, and improve responsiveness to changing customer preferences. They are ideal for customized products, short product life cycles, and markets with high demand uncertainty. However, pull systems may face challenges such as longer response times if capacity or supply is limited.
Push–Pull Boundary
Push–pull boundary is the point in the supply chain where processes shift from push to pull.
Upstream activities such as procurement and basic manufacturing often operate on a push basis, while downstream activities like final assembly, customization, and distribution operate on a pull basis. Correct placement of the push–pull boundary is crucial for balancing cost efficiency and customer responsiveness.
Advantages of Push–Pull View
- Better Balance Between Efficiency and Responsiveness
The push–pull view helps organizations strike an effective balance between cost efficiency and customer responsiveness. Push processes allow firms to achieve economies of scale through forecast-based production, while pull processes ensure quick response to actual customer demand. This balance prevents excessive inventory while still meeting customer expectations, making the supply chain both economical and flexible.
- Improved Inventory Management
One of the key advantages of the push–pull view is better inventory control. Push systems carry inventory based on forecasts, while pull systems reduce inventory by responding only to actual demand. By clearly identifying which stages should hold inventory and which should not, firms can reduce holding costs, avoid overstocking, and minimize the risk of product obsolescence.
- Reduced Demand Uncertainty Risk
The push–pull view reduces the risk associated with demand uncertainty by limiting forecast-based decisions to upstream processes. Downstream processes respond directly to customer orders, which lowers the impact of inaccurate forecasts. This approach helps organizations cope with volatile markets and changing customer preferences, improving supply chain stability and reliability.
- Enhanced Customer Satisfaction
Since pull-based processes are driven by actual customer demand, the push–pull view improves responsiveness and customization. Customers receive products that better match their requirements in terms of quantity, timing, and specifications. Faster response times, accurate order fulfillment, and improved service levels lead to higher customer satisfaction and stronger customer relationships.
- Optimal Placement of Push–Pull Boundary
The push–pull view helps managers determine the most suitable location of the push–pull boundary in the supply chain. Proper placement ensures that upstream activities focus on efficiency while downstream activities emphasize responsiveness. This strategic positioning improves overall supply chain performance and allows firms to adapt quickly to market changes without incurring excessive costs.
- Support for Agile and Lean Supply Chains
The push–pull view supports both lean and agile supply chain strategies. Push processes promote lean operations by reducing production costs and waste, while pull processes support agility by enabling quick response to demand changes. This combination allows organizations to operate efficiently while remaining flexible, which is essential in today’s competitive and dynamic business environment.
- Better Coordination and Information Flow
By clearly distinguishing between push and pull processes, the push–pull view improves coordination among supply chain partners. Demand information flows accurately to pull processes, while forecast information supports push processes. Improved information sharing reduces miscommunication, delays, and inefficiencies, leading to smoother coordination across the supply chain.
- Improved Decision-Making
The push–pull view provides a clear framework for supply chain decision-making. Managers can decide which activities should be planned in advance and which should be demand-driven. This clarity improves planning accuracy, resource utilization, and strategic alignment. As a result, organizations can make informed decisions that enhance performance and competitiveness.
Significance of Push–Pull View
- Alignment of Supply Chain with Market Demand
The push–pull view helps align supply chain operations with actual market demand. Push processes rely on forecasts for upstream activities, while pull processes respond directly to customer orders. This alignment ensures that supply chain decisions are better synchronized with customer needs, reducing mismatches between supply and demand and improving overall market responsiveness.
- Reduction of Inventory-Related Risks
A major significance of the push–pull view lies in reducing inventory-related risks. By limiting forecast-based inventory to upstream stages and using pull-based replenishment downstream, organizations can reduce excess inventory and stock obsolescence. This approach minimizes holding costs and ensures that inventory levels are more closely matched with real demand patterns.
- Improved Supply Chain Responsiveness
The push–pull view enhances responsiveness by allowing downstream processes to react quickly to actual customer demand. Pull-based activities such as final assembly, packaging, and distribution can be adjusted rapidly, enabling faster order fulfillment. This responsiveness is especially important in competitive markets where customer expectations for speed and flexibility are high.
- Effective Management of Demand Uncertainty
Demand uncertainty is a major challenge in supply chain management. The push–pull view helps manage this uncertainty by confining forecast errors to upstream processes. Downstream pull processes rely on real-time demand data, reducing the impact of inaccurate forecasts. This makes the supply chain more stable and reliable in volatile business environments.
- Strategic Placement of Inventory
The push–pull view is significant because it helps determine where inventory should be held in the supply chain. Inventory is usually stored before the push–pull boundary, while downstream stages operate with minimal stock. This strategic placement improves service levels while controlling costs and ensures optimal utilization of resources across the supply chain.
- Support for Customization and Flexibility
The push–pull view supports product customization and flexibility by postponing final production activities until customer demand is known. Pull-based processes enable firms to offer customized products without carrying large inventories of finished goods. This is particularly significant for industries with short product life cycles and diverse customer preferences.
- Better Coordination and Information Flow
The push–pull view improves coordination among supply chain partners by clarifying how demand information flows through the supply chain. Forecast information supports push processes, while actual demand data drives pull processes. This clear separation enhances communication, reduces information distortion, and helps control problems such as the bullwhip effect.
- Foundation for Agile and Competitive Supply Chains
The push–pull view provides a strong foundation for building agile and competitive supply chains. By combining cost-efficient push operations with responsive pull operations, organizations can achieve both operational efficiency and customer satisfaction. This balanced approach enables firms to adapt quickly to market changes while maintaining profitability.
