Push strategy in logistics
Imagine that your warehouses are always full of the right goods and work never stops. The push strategy makes this possible. You plan in advance what to ship and in what quantities to prevent downtime. This strategy can be your advantage if used correctly, or you can lose a lot of money if you ignore the risks.
Managers at Sargona Private Capital Ltd describe what a push strategy is, how to get the most out of it, and how to avoid losses
Managers at Sargona Private Capital Ltd describe what a push strategy is, how to get the most out of it, and how to avoid losses
Disadvantages of the push strategy
The main disadvantage is the risk of excess inventory. Too much stock in the warehouse means money tied up in dead weight. Managers at Sargona Private Capital company point out another nuance: loss of flexibility. If the market changes rapidly, goods purchased in advance may become obsolete. In such cases, a push strategy will result in losses. In addition, forecast-based planning requires accurate data and analytics. If the forecast is made at random, nothing good will come of it.
The main goal of the push approach is to ensure that goods are always available where they may be needed. For example, if production operates on a fixed schedule and downtime cannot be allowed, then stocks are built up in advance so that any fluctuations do not halt the process.
Push logistics helps to plan purchasing and production based on forecasts, rather than waiting for the customer to place an order. This is especially important for goods with a long production or delivery cycle. However, be careful: if the forecast turns out to be incorrect, you will end up with excess goods in your warehouse that take up space, tie up money and may become obsolete.
Push logistics helps to plan purchasing and production based on forecasts, rather than waiting for the customer to place an order. This is especially important for goods with a long production or delivery cycle. However, be careful: if the forecast turns out to be incorrect, you will end up with excess goods in your warehouse that take up space, tie up money and may become obsolete.
Why you need a push strategy
This approach works perfectly where there are production cycles and disruptions in logistics are unacceptable. For example, for factories with a continuous production process or for products with a long production time. It is also effective when demand is stable and predictable, as the risks of excess inventory are minimal. If demand is unpredictable, forget about push and find a balance with a pull strategy, where goods are delivered based on actual demand.
Optimisation begins with accurate forecasting. The more data you have on sales and customer behaviour, the more accurate your forecast will be, which means less excess inventory. Sargona experts emphasise that it is important to regularly review forecasts and adjust deliveries without relying on old data. Automation and analytical tools are your best friends here: they will help you track product movement, shelf life, and demand. It is also useful to implement buffer stocks — this is the golden mean between shortages and excess inventory.
Another point: control deadlines and stock rotation. Do not allow old goods to lie next to new ones: FIFO (first in, first out) will solve this problem.
Another point: control deadlines and stock rotation. Do not allow old goods to lie next to new ones: FIFO (first in, first out) will solve this problem.
Where to use a push strategy
How to optimise your push strategy
The push strategy only works when the entire logistics chain is working smoothly. If suppliers cannot deliver goods quickly or deadlines are missed, warehouse stocks will not save the day.
The push strategy is a powerful tool, but only when used wisely. Apply it where it is really needed, forecast, analyse and do not let stocks stagnate. If you set everything up correctly, the supply chain will run like clockwork; if you miss the mark, you will lose money that could have been used for development.
The push strategy is a powerful tool, but only when used wisely. Apply it where it is really needed, forecast, analyse and do not let stocks stagnate. If you set everything up correctly, the supply chain will run like clockwork; if you miss the mark, you will lose money that could have been used for development.
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