The Push and Pull of Product Demand on Supply Chain Models

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The Josai Journal of Business Administration




In business we strive to satisfy our customers in economically efficient ways. As we drive inefficiency out of our internal organization, we may realize that our ability to fully satisfy demand as efficiently as possible is constrained by our suppliers or our distribution channel. Supply chain management (SCM) strives to direct an organization's internal and external influence to efficiently deliver maximum value to the end customer. To this end, it is wise to understand the nature of product offerings so that we may tailor our supply chain model to best suit our products. Once we understand key aspects of our products, such as demand characteristics, we can better design and manage our supply chain. A supply chain's focus, whether on physical efficiency or market responsiveness, determines its primary purpose, manufacturing process, inventory strategy, lead time targets, supplier criteria, and product design strategy. SCM balances cost efficiency objectives with responsiveness requirements by managing supply, transformation and distribution relationships. A comparison of DELL Inc. and Toyota Motor Corporation illustrates these supply chain links.