Postponement - Postponement At the heart of time-based...

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Postponement At the heart of time-based competition is the capability to postpone customization and the timing of logistical fulfillment. The concept of postponement has long been discussed in business literature. However, practical examples involving postponement are directly related to advancements in information technology. Postponement strategies and practices serve to reduce the anticipatory risk of supply chain performance. As noted earlier, anticipatory arrangements require most inventory to be produced to final product state and deployed on the basis of forecasts or planned requirements. Working arrangements, which allow postponement of final manufacturing, customization, or distribution of a product until receipt of a customer order, reduce the incidence of wrong manufacturing or incorrect inventory deployment. Two types of postponement are common in highly responsive supply chain operations: (1) manufacturing, or form postponement; and (2) geographic, or logistics postponement. Manufacturing Postponement The global competitive climate of the 21st century is facilitating the development of new manufacturing techniques designed to increase flexibility and responsiveness while maintaining unit cost and quality. Traditional practice has focused on achieving economy of scale by planning extensive manufacturing runs. In contrast, flexible manufacturing logic is typically driven by a desire to increase responsiveness to customer requirements. The vision of manufacturing, or form, postponement is one of products being manufactured one order at a time with no preparatory work or component procurement until exact customer specifications are fully known and purchase confirmation is received. This dream of building to customer order is not new. What is new is the expectation that flexible manufacturing can achieve such
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This note was uploaded on 10/21/2011 for the course SCM 303 taught by Professor Bixbycooper during the Spring '09 term at Michigan State University.

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Postponement - Postponement At the heart of time-based...

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