What is a Push System?

A push system is characterized by production planning and inventory management practices that rely on forecasted demand rather than actual customer orders. In this approach, products are manufactured in anticipation of demand based on predictive analytics and historical sales data. This means that the manufacturing process is initiated before the actual demand is confirmed, with the expectation that the finished goods will be sold to customers once they become available.

The distinction lies in the way inventory levels are maintained in relation to anticipated sales. This method can lead to situations where excess inventory accumulates if forecasts are inaccurate, thereby increasing holding costs and potentially leading to waste if products become obsolete or expire.

Understanding push systems is crucial for managing production schedules, inventory turnover, and aligning supply chain strategies with market research insights.