What is Pull Inventory?
Pull inventory is a term used in inventory management to describe the process of ordering new inventory in response to customer demand. This inventory-ordering strategy helps ensure that businesses have enough stock on hand to meet customer demand and avoid stockout situations. In contrast to the push inventory approach, which orders inventory based on forecasting and assumptions, pull inventory focuses on responding to actual customer demand.
Benefits of Pull Inventory
Pull inventory offers several advantages for businesses over the push inventory approach.
- Improved accuracy: Pull inventory is based on real customer demand, which makes it more reliable and accurate than forecasting.
- Reduced costs: Pull inventory can help businesses reduce their inventory costs by avoiding overstocking or stockouts.
- Real-time data: Pull inventory provides businesses with up-to-date data about customer demand, so they can better plan for future stock orders.
- Better customer service: With pull inventory, businesses can ensure they have enough stock on hand to meet customer demand and prevent stockouts.
Examples of Pull Inventory
Pull inventory can be used in a variety of industries, from retail to manufacturing. Here are a few examples of how businesses can use pull inventory:
- Retail stores: Retail stores can use pull inventory to order new stock as soon as customer demand increases. This ensures that stores have enough stock on hand to meet customer demand.
- Manufacturing: Manufacturers can use pull inventory to order new raw materials as soon as customer orders come in. This allows manufacturers to quickly and efficiently produce the products customers need.
- Warehousing: Warehouses can use pull inventory to ensure they have enough stock on hand to meet customer demand. This helps warehouses avoid overstocking and stockouts.
Conclusion
Pull inventory is a powerful inventory-ordering strategy that can help businesses reduce their costs, improve accuracy, and provide better customer service. By responding to customer demand, businesses can ensure they have enough stock on hand to meet customer demand and avoid stockouts.References: