Postponement Strategies in Supply Chain Management

Postponement strategy is one of the major supply chain management (SCM) pr- tices that has a discernible impact on rms’ competitive advantage and organi- tional performance. Postponement is a mass customization strategy that captures the advantages of both mass production and mass customization. Recent research studies have identi ed four common postponement strategies, namely pull, logistics, form and price postponement. The former three postponement strategies are linked to production and manufacturing, while the last one is a pure pricing strategy. They aim at balancing the costs and bene ts of mass production and mass customization. Practical examples of postponement can be found in the high-tech industry, food industry and other industries that require high differentiation. However, empirical studies have found that postponement may not be an evident SCM practice compared to the other practices. In addition, postponement has both positive and negative impacts on a supply chain. The advantages include following the JIT principles, reducing end-product inventory, making forecasting easier and pooling risk. The high cost of designing and manufacturing generic components is the main drawback of postponement. Thus, the evaluation of postponement strategy is an important research issue and there have been many qualitative and quantitative models for analyzing postponement under different scenarios.

In supply chain management postponement is a deliberate to delay final manufacturing until a customer places an order. This work analyzes how both pull posteponement strategy and form postponement strategy can be leveraged to yield substantial benefits.

Postponement strategy is one of the major supply chain management (SCM) pr- tices that has a discernible impact on rms’ competitive advantage and organi- tional performance. Postponement is a mass customization strategy that captures the advantages of both mass production and mass customization. Recent research studies have identi ed four common postponement strategies, namely pull, logistics, form and price postponement. The former three postponement strategies are linked to production and manufacturing, while the last one is a pure pricing strategy. They aim at balancing the costs and bene ts of mass production and mass customization. Practical examples of postponement can be found in the high-tech industry, food industry and other industries that require high differentiation. However, empirical studies have found that postponement may not be an evident SCM practice compared to the other practices. In addition, postponement has both positive and negative impacts on a supply chain. The advantages include following the JIT principles, reducing end-product inventory, making forecasting easier and pooling risk. The high cost of designing and manufacturing generic components is the main drawback of postponement. Thus, the evaluation of postponement strategy is an important research issue and there have been many qualitative and quantitative models for analyzing postponement under different scenarios.

Analysis of Pull Postponement by EOQ-based Models.- Analysis of Postponement Strategy by EPQ-based Models.- Evaluation of a Postponement System with an (r, q) Policy.- Simulation of a Two-End-Product Postponement System.- Application of Postponement: Examples from Industry.- Conclusions, Implications and Future Research Directions.