SCMPAPER - DeVry University Operations Strategy BSOP206...

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DeVry University Operations Strategy BSOP206 Group Final Krystal Obando Mahanaim Peterson Jannie V. Gonzalez Professor Zalila December 8, 2006
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Postponement is the delaying of any modification or customizations to the product as long as possible in the production process. When someone places an order with Dell’s build to order website, production is held off until after an order is placed. The company has the basic computer made with stock software and other components. Dell will not finish any production until the customer sets their specifications of what they want in their new computer. “Holding ‘components’ in inventory and assembling them only after the customer has placed an order, is a postponement strategy that is more appropriate for Dell.” 1 The requirements for a postponement strategy to work are that a company must have a high variety of product, flexible manufacturing systems, and real time information and communication. The real time information is very important because once an order is placed by a customer the company must receive the order as soon as possible to begin the process of customizing that computer to the customers needs. This allows the company to complete an order quickly so it can be sent out to the waiting customer as rapidly as possible. There is very little time when a good is finished and when it is sent out. This lowers the holding cost greatly by having less finished goods stored in inventory. The other advantage of postponement is the low transportation costs, an easy customizable product, and the improved competitiveness. Mass customization is a rapid, low cost production that caters to constantly
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This note was uploaded on 02/20/2008 for the course BSOP 206 taught by Professor Professorzalila during the Fall '06 term at DeVry Houston.

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SCMPAPER - DeVry University Operations Strategy BSOP206...

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