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380 Part Three Key System Applications for the Digital Age

FIGURE 9.4 PUSH- VERSUS PULL-BASED SUPPLY CHAIN MODELS

The difference between push- and pull-based models is summarized by the slogan “Make what we
sell, not sell what we make.”

levels, improve delivery service, speed product time to market, and use assets
more effectively.
Total supply chain costs represent the majority of operating expenses for many
businesses and in some industries approach 75 percent of the total operating
budget. Reducing supply chain costs has a major impact on firm profitability.

FIGURE 9.5 THE EMERGING INTERNET-DRIVEN SUPPLY CHAIN

The emerging Internet-driven supply chain operates like a digital logistics nervous system. It provides
multidirectional communication among firms, networks of firms, and e-marketplaces so that entire
networks of supply chain partners can immediately adjust inventories, orders, and capacities.

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