Which supply chain strategy is based on actual demand rather than forecasts?

The pull supply chain strategy is grounded in actual demand rather than forecasts. This approach emphasizes responding to customer needs as they arise, meaning that production and inventory decisions are driven by actual orders from customers.

In a pull system, products are made only when there is a confirmed order, which can lead to reduced waste and lower inventory costs. Organizations adopting this strategy are often more agile and can quickly adjust to changes in demand, leading to better alignment between production and what customers actually want.

In contrast, other strategies such as push supply chains operate based on forecasts, where production happens in anticipation of demand. This can sometimes lead to overproduction or excess inventory if the forecasts are inaccurate. Static and mixed supply chains integrate different approaches but do not singularly focus on actual demand like a pull supply chain does. Thus, the pull supply chain strategy is most effectively aligned with real-time demand signals, making it a crucial concept in modern supply chain management.