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Push/Pull Supply Chain Strategies: Which is Better in 2024?

Efficient supply chain management is essential to ensure the seamless flow of pharmaceutical products.

The pharmacy sector relies heavily on well-defined strategies to meet the demands of patients and healthcare providers.

There are many strategies in pharmacy supply chain management but, the most famous is the push and pull strategy.

What are the Push and Pull Strategies in Pharmacy Supply Chain Management?

Pharmacy supply chain management involves a complex web of activities, including

Push and pull strategies are two prominent strategies used to streamline this process.

Let us delve into each one of these to understand it better.

Push Strategy in Pharmacy Supply Chain Management

Pharmaceutical products are manufactured or procured in anticipation of demand.

Inventory levels are based on

  • Historical data
  • Forecasts
  • Expected market trends

The push approach relies on proactive decision-making to ensure products are readily available when needed.

This method aims to minimize stockouts and delays in fulfilling orders.


The Advantage of the Push Strategy

1. Improved Responsiveness

By maintaining a surplus inventory, pharmacies can quickly respond to sudden surges in demand or unforeseen circumstances such as emergencies.

This helps ensure that patients receive the medications they need promptly.

2. Efficient Product Planning

Push strategy allows for

  • Better production planning
  • Optimizing manufacturing processes
  • Reducing costs

It enables pharmacies to take advantage of scale economies and minimize production inefficiencies.

3. Enhanced Distribution Control

Pharmacies can exercise greater control over the distribution process by proactively shipping products to various locations, ensuring availability at critical points.

This helps streamline the supply chain and ensures that medications reach their intended destinations efficiently.

The Limitations of the Push Strategy

1. Increased Holding Costs

Storing excess inventory incurs additional costs, including

  • Warehousing
  • Insurance
  • Maintenance

This can impact the overall profitability of pharmacies and may lead to increased product costs for consumers.

2. Risk of Obsolescence

Rapid advancements in pharmaceuticals may render products obsolete if demand shifts towards newer alternatives, leading to inventory write-offs.

This can result in financial losses for pharmacies.

3. Lack of Real-time Demand Visibility

A push strategy relies heavily on forecasting accuracy, and any discrepancies may result in overstocking or understocking, leading to inefficiencies.

Without real-time demand visibility, pharmacies may struggle to accurately predict and meet customer needs.

Pull Strategy in Pharmacy Supply Chain Management

Opposite to the push strategy, the pull strategy emphasizes a demand-driven approach.

Products are manufactured or procured based on actual customer demand.

This method ensures a lean inventory system, reducing the risk of excess stock and obsolescence.


The Advantage of the Pull Strategy

1. Inventory Optimization

By aligning procurement with actual demand, pharmacies can reduce holding costs and mitigate the risk of excess stock.

This helps improve overall profitability and reduces the potential for wastage.

2. Minimized Obsolescence

The pull strategy allows pharmacies to adapt swiftly to market trends, reducing the likelihood of holding outdated products.

By aligning supply with demand, pharmacies can ensure that they are offering the most relevant and in-demand medications to their customers.

3. Enhanced Efficiency

By tracking real-time demand signals, pharmacies can streamline their operations and allocate resources more effectively.

This helps minimize waste and improve overall operational efficiency.

The Limitation of the Pull Strategy

1. Delayed Fulfillment

Depending solely on customer demand can lead to delays in fulfilling orders, particularly during unexpected spikes in demand.

This can impact patient satisfaction and may require additional efforts to manage and communicate delays effectively.

2. Increased Supply Chain Complexity

The pull strategy requires a robust information-sharing system and close collaboration between stakeholders to ensure accurate demand forecasting and seamless inventory replenishment.

It may involve additional coordination efforts and technological infrastructure to effectively manage the supply chain.

3. Limited Responsiveness

Pull strategy might face challenges in meeting sudden changes in demand, as the supply chain might require time to adjust and respond accordingly.

Rapid fluctuations in demand can pose logistical challenges, requiring proactive measures to ensure the timely and efficient delivery of medications.

The Role of Automation in the Pharmacy Supply Chain Management

Automation has emerged as a game-changer in pharmacy supply chain management.

By leveraging technological advancements, automation offers several benefits that can overcome the limitations of both push and pull strategies.

1. Demand Forecasting and Inventory Management

Automated systems equipped with advanced algorithms can analyze historical data, market trends, and other relevant factors to generate accurate demand forecasts.

This enables pharmacies to

  • Optimize inventory levels
  • Reduce holding costs
  • Minimize the risk of stockouts or overstocking

By leveraging automation, pharmacies can make data-driven decisions and align their supply with actual demand, leading to improved inventory management.

2. Real-time Data Analytics

Automation tools provide real-time visibility into the supply chain, offering insights into

  • Inventory levels
  • Order status
  • Demand patterns

This data empowers decision-makers to make informed choices, leading to better resource allocation and improved efficiency.

Real-time data analytics enable pharmacies to identify trends, patterns, and potential bottlenecks, allowing them to proactively address supply chain challenges.

3. Seamless Collaboration and Communication

Automated systems facilitate seamless communication and collaboration between different stakeholders in the supply chain, including suppliers, manufacturers, distributors, and pharmacies.

This ensures faster response times, reduced lead times, and improved coordination, resulting in a more efficient and effective supply chain.

Automation tools enable real-time information sharing, allowing stakeholders to make timely decisions and quickly adapt to changes in demand or supply.

4. Process Streamlining

Automation streamlines various processes involved in pharmacy supply chain management, such as

  • Order processing
  • Invoicing
  • Payment reconciliation

By eliminating manual tasks and reducing human errors, pharmacies can enhance operational efficiency and reduce administrative burdens.

Automated systems can integrate with existing pharmacy management systems, simplifying workflows and freeing up valuable time for staff to focus on more critical tasks.

Unlock the Potential of Automation in Pharmacy Supply Chain Management

Pharmacy supply chain management is a complex endeavor that requires careful consideration of strategies and technologies to ensure timely access to vital pharmaceutical products.

Both push and pull strategies have their advantages and limitations.

But automation emerges as a powerful tool to overcome these challenges.

By using automation in pharmacy supply chain management, pharmacies can ensure seamless access to medications and better healthcare outcomes for patients.

With over 8 years of experience in the healthcare software development industry, we, at SyS Creations, have established ourselves as a leading provider of pharmacy software solutions.

The user-friendly interface and intuitive design of our solutions make it easy for pharmacists and staff to navigate and utilize the software effectively.

We can help you explore our pharmacy automation software solution, which encompasses these strategies and more, to transform your pharmacy supply chain management processes.