Evaluation of postponement structures to accommodate mass customization (original) (raw)

Evaluation of supply chain structures using a delayed product differentiation process

The International Journal of Advanced Manufacturing Technology, 2008

In this paper, we consider a two-level supply chain consisting of a retailer and n "non-identical" customers. The retailer orders different perishable products in response to the demands of the customers. The unsatisfied demand at a retailer is partially backlogged with a timeproportional backlogging rate. We formulate models for a postponement system and an independent system to minimize the total average cost function per unit time for ordering and keeping n "non-instantaneous deteriorating items." An algorithm is given to derive the optimal solutions of the proposed models. The impact of the deterioration rate on the inventory replenishment policies is studied with the help of both theoretical and numerical results.

Supply Chain Design: An Overview

2007

In recent years, the rapid technological advancements, the increased economic uncertainty, and the globalization of economic activities have resulted in fierce competition, and more sophisticated and demanding customers. These characteristics of the new economic environment are translated to short product life cycles, increased demand for customized products, and quick response to customers’ and market’s needs in terms of quality and quantity, posing significant pressure to supply chain participants. Several strategies for supply chain design have been proposed by researchers and employed in practice in order to aid enterprises to cope successfully and effectively and sustain their competitive advantage. This paper presents an overview of postponement, flexibility and new inventory control tactics that have attracted significant attention.

A Stochastic Model for a Delayed Product Customization

Postponement, also known as delayed differentiation, is a strategy used by some firms in supply chain to delay the differentiation of a product until a latest possible point closer to consumption (via demands for the product) as a way to compromise between a complete push system and a complete pull system. The study herein extends Lee and Tang's framework for mass customization of products in three different ways. First, the components coming from the supply side are incorporated in the framework to account for a possible supply risk. Secondly, we consider a push-pull system in which common tasks to manufacture two types of products are performed first up to a pre-determined differentiation point, and arriving demands will trigger the production process to begin making the final products based on individual customization. Thirdly, we model the demands to occur according to a Markovian arrival process (MAP), a versatile point process very useful in practice. We employ simulation to bring out the qualitative nature of the model under study through illustrative examples.

Analysis of postponement strategy by EPQ-based models with planned backorders

Omega, 2008

This paper develops economic production quantity (EPQ)-based models with planned backorders to evaluate the impact of the postponement strategy on a manufacturer in a supply chain. We derive the optimal total average costs per unit time for producing and keeping n end-products in a postponement system and a nonpostponement system, respectively. By comparing the optimal total average costs of the two systems, we evaluate the impact of postponement on the manufacturer under four circumstances. Our results show that postponement strategy can give a lower total average cost under certain circumstances. We also find that the key factors in postponement decisions are the variance of the machine utilization rates and the variance of the backorder costs. This is the Pre-Published Version.

1Implications of Form Postponement to Manufacturing

2014

While much is written in the literature about the benefits and strategic impact of form postponement (FPp), little is still known about its application. We address ‘how ’ FPp is applied in terms of its operational and logistics implications within manufacturing facilities. This paper is a retrospective study of the application of FPp in three diverse manufacturing environments: a manufacturer of specialist high voltage cabling equipment we call ‘Electrico’; a manufacturer of industrial electric motors we call ‘Motorco’; and a manufacturer of control systems and components mainly for automated telling machines we call ‘Controlco’. Our findings show that FPp improved responsiveness of manufacturing in all cases, but that none of the applications of FPp was ideal from a theoretical perspective. The production planning system must be both responsive and flexible to support the application. For highly customised products, the customer order decoupling point (CODP) must be located suffici...

Case Studies of Postponement in the Supply Chain

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Improving the supply chain performance: use of forecasting models versus early order commitments

International Journal of …, 2001

This paper evaluates the impact of forecasting models and early order commitment in a supply chain with one capacitated manufacturer and four retailers under demand uncertainty. Computer simulation models were used to simulate di erent demand forecasting and inventory replenishment decisions by the retailers as well as production decisions by the manufacturer under a variety of demand patterns and capacity tightness scenarios. This study found that early order commitments signi®cantly a ected the total costs and service levels, to various degrees, for the manufacturer and the retailers, suggesting that the bene®ts of early order commitment could be in¯uenced by a combination of forecasting models, demand patterns and capacity tightness.