Therefore, medical supplies manufacturer cannot select postponement as their supply chain strategy any more than a grocer can postpone delivering their cereal.
While postponement is conventionally thought of as a supply chain strategies, a little thinking will dispel this notion.
Till now in this series, we have covered the lean and agile as supply chain strategies and this is the third conventional supply chain strategy I will be talking about.
The figure graphically represents this effect as a funnel: For example, it Analysis postponement much easier to forecast the total Analysis postponement for LCD TVs than it is for an individual TV of a specific brand, model, screen size, resolution, and color contrast ratio.
You can continue reading more on the subject in the book. The postponement strategy leverages the above characteristics of demand forecasting. In the next article, I will talk about the speculation as a supply chain strategy and why that too falls short of truly being a strategy for supply chains.
Postponement is not an absolute choice, it Analysis postponement an imperative forced by the type of industry, assortment, and demand patterns.
The situations in which postponement may be an explicit choice to be made for a supply chain are limited, but may become real options for specific categories of products or sales channels of a company. However, after developing an end-to-end supply chain visibility, Avon saw the opportunity in postponing the creation of its Analysis postponement product by placing the labels in the desired target language.
The farther the time window for which the demand is being forecasted, the more inaccurate it will be. The accuracy of the forecast demand decreases with an increase in the time horizon. For example, a postponement strategy for delivering supplies to a trauma center or cereal to a grocery store are just not practical choices, even though it may allow for delivery of specific medical kits optimal for the type of trauma or the correct size of cereal packages in response to the actual demand.
For retailers, this takes the shape of postponing the delivery of the final product to its destination, while for assemble-to-order manufacturers this means postponing the final assembly of the product.
The Key to Reaching Business Goals. When Dell started, this was not necessarily the case in the industry, however, Dell invented a new business model and leveraged postponement as a business model — not as a supply chain strategy — though, it then designed their supply chain to support this business model.
That is the distinction I want to make clear — postponement as a business model which then drives the supply chain strategy and not the other way around. However, in few situations the production and demand patterns may allow postponement to become a business option, in which case, the supply chain must be designed to support that choice — an example is Avon as provided by Shoshanah Cohen and Joseph Roussel in their book on Strategic Supply Chain Management.
It dictates that the firms should postpone the creation or delivery of the final product as long as possible. Avon declined to label their bottles themselves for a long time, viewing this as additional cost and complexity.
For manufacturing scenarios like build-to-stock, the postponement strategy may drive pushing the packaging or final assembly of the products, allowing the manufacturer to personalize, configure finished products to customer orders, and change the final product mix to suit any changes in demand.
To find this new approach to build effective supply chainsunderstand the supply chain sphere of influencefind out what drives your supply chainand learn Analysis postponement the new design imperative to build supply chain capabilities to support your strategy.
And that is also the reason for why I believe that postponement as a supply chain strategy puts the facts on their head — supply chain strategy must follow a business strategy and not the other way around!
The postponement strategy effectively reduces inventory obsolescence and takes out the risk and uncertainty costs associated with having undesirable products, but it requires an integrated and agile supply chain to ensure that the latest demand forecasts can be frequently created and propagated through the supply chain to produce or allocate the right products for their customers.
For example, Dell has mastered the art of postponement for their custom-designed machines for individual consumers. If you are looking for an alternate way to design effective supply chains, the answer does not lie in adopting theories in the hope of finding the right answer, but to build supply chain capabilities driven by your business staretgy.
Friday, October 29, Postponement as Supply Chain Strategy Next in my series on supply chain strategy is the postponement as a strategy.APPENDIX I TREND ANALYSIS – POSTPONEMENT _____ Trend Statement.
The notion of geographic, or logistics, postponement involves building and stocking a full-line inventory at one or a limited number of strategic locations close to final markets. “Postponement centres around delaying activities in the supply chain until real information about the markets are available”.
(Y. Chapter2 Analysis of Pull Postponement by EOQ-based Models A number of quantitative models for analyzing postponement based upon cost and timeevaluation havebeen ultimedescente.comthemassumedthatthe.
Case Studies of Postponement in the Supply Chain by Susan M. Rietze B.S. Operations Research United States Air Force Academy, Case Studies of Postponement in the Supply Chain by postponement.
Further analysis comments on the potential of postponement to be. Industrial Manufacturing Making sense of postponement strategies Late-stage production and assembly help manufacturers meet customer expectations for product customization.
Our theoretical analysis and computational results show that a postponement strategy for perishable items can give a lower total average cost under certain circumstances.
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