ENPC MBA Lecture Slides 2010 Day 6 - ENPC School of...

ENPC School of International
Management
Maroc 12 MBA
Logistics and Supply Chain Management
Saturday 10 April 2010
Professor David Grant
[email protected] / [phone]

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Agenda - Day 6
Postponement and Speculation / Lean versus Agile
‘Leagility’
Supply Chain Risk
Reverse Logistics and Sustainable Logistics and
SCM
In-class Case Exercise and Presentations:
Ceramica

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Principles of postponement and speculation
Postponement:
Delay committing products to particular market
segments or customers as long as possible,
preferably until firm orders have been received.
Speculation:
Commit products at an early stage to particular
market segments or customers in the hope
gaining additional sales.
Louis Bucklin (1965), ‘Postponement, Speculation and the Structure of
Distribution Channels,’ Journal of Marketing Research.

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Two types of postponement
1. FORM POSTPONEMENT:
or ‘Manufacturing Postponement’
Manufacture products in generic form – defer final
customisation.
Make-to-order rather than make-for-stock
Delay the ‘explosion’ in product variety / SKUs
E.g. Whirlpool, Benetton

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Relationship between postponement and customer ordering
Low opportunity
for advance
ordering
High opportunity
for advance
ordering
Little opportunity
for postponement
newspapers
chicken
Large opportunity
for postponement
clothing
computers
cars
sofas

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Types of postponement
2. PLACE POSTPONEMENT: (geographical form)
or ‘Logistical Postponement’
Hold inventory centrally –delay dispersal to regional
stockholding points
Avoid speculative risk of distributing too much
inventory to regional markets

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Postponement/speculation strategic matrix
Speculation
Decentralised
inventory
Postponement
Centralised
Inventory + direct
distribution
Speculation
Make to inventory
Full speculation
strategy
Logistics
postponement
strategy
Postponement
Make to order
Manufacturing
postponement
strategy
Full
postponement
strategy
LOGISTICS
MANUFAC-
TURING

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Postponement/speculation cost matrix
Speculation Postponement
Speculation
Low production cost
High inventory cost
Low delivery costs
High custom. service
Low production cost
Low inventory cost
High delivery costs
Low custom. service
Postponement High production cost
High inventory cost
Low delivery costs
High custom. service
High production cost
Low inventory cost
High delivery costs
Low custom. service
LOGISTICS
MANUFAC-
TURING

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1.Specify what creates value from the customers’
perspective.
2.Identify the steps necessary to add value at each stage
in the production and distribution process
(ie. the ‘value stream’)
3.Make products flow smoothly along the value stream
4.Only make what is demanded by the customer.