Operationalising form postponement from a decision-making perspective

Form postponement means delaying the commitment of inventory to the final configuration of a product as long as possible. Many firms today are striving to redesign their products and/or their manufacturing and supply chain processes to implement form postponement. Opportunities for form postponement, however, are sometimes lost in the companies’ production-planning processes. By focusing on the deferring of product mix decisions in the master production scheduling process, this paper shows that form postponement opportunities can be divided into two components: one whose pursuit necessarily requires product and/or transformation process redesign, the other that can be pursued by changing the sales forecasting and master production scheduling process alone. We develop an operational procedure to identify and quantify, for a given product family, all opportunities for form postponement and their two respective components. Then, we discuss and empirically illustrate how the proposed measurement procedure may support companies in changing their decision-making routines to implement form postponement. Finally, we set future research directions on form postponement suggested by our results.     

Supplier relationship impacts on postponement strategies

The main purpose of this paper is to examine the impact of the supplier relationship on postponement implementation in the buying firm. The links between three supplier relationship constructs and three postponement constructs are hypothesised and tested through structural modelling. These hypotheses are then tested using empirical data of a sample of 219 manufacturing firms. The findings suggest that the ability of the buying firm to delay product design decisions (postponement in product design) is positively related to the level of supplier commitment, supplier expectation of a continuing relationship with the buyer, and level of joint buyer and supplier actions. However, the buying firm’s ability to delay purchasing decisions about which items to order or how many to order (postponement in purchasing operations) was only positively related to the level of joint buyer and supplier actions. By contrast, the buying firm’s ability to delay the final product configuration (postponement in production operations) was not directly affected by those aspects of the supplier relationship investigated. These findings give greater insight into how different aspects of supplier relationship impact different types of postponement than previous research and have significant implications for practice.     

Relationships between lean product development enablers and problems

The lean product development (LPD) approach uses lean principles and enablers (tools, techniques and practices) to reduce waste and continuously improve the product development processes (PDP). Other than reducing product development lead time, LPD also aims at improving quality by reducing problems that might occur during the process. Several LPD enablers are proposed in the existing literature; however, there is limited knowledge on how these enablers may effectively counteract the occurrence of problems in the PDP. We empirically tested the association between 4 groups of LPD enablers and 11 groups of LPD problems in a sample of 64 companies that are undergoing lean implementation in the shop floor and administrative areas. There are two major contributions here. First, we propose an empirically validated instrument for assessing the adoption of LPD enablers and the incidence of LPD problems in companies filling an existing gap in the literature. Second, we provide understanding on how LPD enablers can mitigate the incidence of LPD problems, allowing companies undergoing lean implementation to better manage their PDP. Moreover, some results demonstrate that the association between enablers and problems may not be as suggested in the existing literature.     

基于缩短供应链响应周期的运作模式研究

通过分析总结推动式和拉动式供应链的特点及对用户需求响应时间的变化，阐明基于延迟策略的推-拉结合式供应链的综合优势，提出利用延迟和压缩提前期的方法缩短供应链的响应周期；论述了对于不同生产类型企业为缩短响应时间可以采取不同的供应链运作模式；构建了基于延迟策略的模块化供应链模型，描述了该模型的运作流程以及实施中应注意的问题。     

Implications of form postponement to manufacturing: a case study

Postponement is an approach that helps to deliver more responsive supply chains. Form postponement involves the delay of final manufacturing until a customer order is received and is commonly regarded as an approach to mass customization. However, while much is written in the literature about the benefits and strategic impact of form postponement, little is still known about its application. This paper addresses how form postponement was applied in terms of its operational implications within a manufacturing facility through a retrospective study that tracked implementation of form postponement in a manufacturer of specialist high-voltage cabling equipment, called here ‘ElectriCo’. The operational measures for products selected for form postponement were compared with those for products that continued to be made under make-to-order and make-to-stock regimes. Propositions were tested that addressed the operational implications of form postponement within the manufacturing facility, the impact of form postponement on selected performance metrics, and the demand profile for which form postponement was the preferred regime. Multiple data collection methods were used whereby documentary, archival and database evidence were used to measure operational characteristics across a broad front. The findings show that form postponement improved responsiveness but did not necessarily improve delivery reliability. The extent to which the order lead time can be reduced is dependent not only on the responsiveness of the postponed process, but also crucially on the responsiveness of the planning system. It was found that the problem of adapting the manufacturing planning and production scheduling systems at ElectriCo had been underestimated. This and other problems subsequently undermined the form postponement application and led to its eventual abandonment. The authors are undertaking further research of form postponement applications in different production contexts to provide further evidence for its operational implications.     

Supply chain risk assessment during new product development: a group decision making approach using numeric and linguistic data

Companies strive to minimise supply chain related risks during new product development as any glitch while developing new products can lead to considerable delay in product launch with severe financial implications. However, many organisations face difficulty in properly assessing the vulnerabilities of their globally dispersed supply chains during the product development stage as no suitable procedure for that purpose seems to be readily available in the literature. The present research is an attempt to fulfil this requirement. A step-by-step approach for supply chain risk assessment during new product development, involving group decision making, is suggested. This approach can use both numeric and linguistic data and helps in determining vulnerability scores for various sub-systems and for each supplier of the most vulnerable sub-system. This is followed by failure mode effect analysis (FMEA) which helps prioritise failure modes of vulnerable suppliers and thus create specific control plans to mitigate supply related failures. Using this approach, organisations can devise control plans to alleviate the supplier related risks during new product development. Although, the methodology is illustrated through an application in aircraft manufacturing, it can also be used in other discrete and process manufacturing industries.     

客户导向与竞争导向影响运营绩效作用机理研究：基于模块化视角

为了揭示生产实践在市场导向影响运营绩效中的作用,基于模块化视角研究客户导向与竞争导向影响运营绩效作用机理。204份有效样本的实证研究结果表明,客户导向与竞争导向均显著正向影响产品模块化（β=0-21/0-20）,但是对流程模块化均无显著影响;产品模块化显著正向影响流程模块化（β=046）;产品模块化对运营绩效并无显著影响,但是流程模块化显著正向影响运营绩效（β=0-29）;控制变量企业规模和运营年限对运营绩效均未表现出显著作用。结果表明,模块化可以作为企业实施市场导向战略时的一种有效生产实践用于提高运营绩效,但是产品模块化和流程模块化的影响机制存在着差异。     

Implications of postponement for the supply chain

As a marketing, logistics and manufacturing concept, postponement has been around in the literature for a long time. Its application can also be dated to the 1920s. However, only in recent times has it been used as a supply chain strategy. Postponement fosters a new way of thinking about product design, process design and supply chain management. In this paper, we rethink the supply chain from a postponement point of view and present the implications of postponement for the decoupling point, supply chain integration, control of the supply chain and capacity planning issues. The objective is to extend the significance of postponement towards the perspective of a holistic supply chain context.     

Developing environmental and social performance: the role of suppliers’ sustainability and buyer–supplier trust

We explore how environmental and social performance of manufacturing firms can be improved as sustainable supply chain management (SSCM) develops and evolves within a firm from internal to external practices. Importantly, this study considers how key suppliers’ sustainability performance and buyer–supplier trust mediate and moderate such a development. A conceptual framework is developed which relies on resource-based theories and emerging empirical evidence. Then, partial least square methodology is applied on survey data from a sample of Italian manufacturing firms. Results show that manufacturing firms’ sustainability performance improves as SSCM develops; however, while internal practices have a direct impact on performance, the effect of external practices on a manufacturing firm’s sustainability performance is fully mediated by key suppliers’ sustainability performance. Yet, buyer–supplier trust significantly influences the scope of such gains. Since evidence suggests that manufacturing firms are still struggling with how to leverage supply chain innovation potential for sustainable development, this study provides a timely and valuable contribution.     

Original equipment manufacturers (OEM) manufacturing strategy for network innovation agility: the case of Taiwanese manufacturing networks

Manufacturing companies in newly industrialized countries contribute substantially to their global innovation networks. Those manufacturers perform not only production and physical distribution functions, but also design and engineering functions in the processes of bringing new products world-wide. This paper examines the relationship between manufacturing strategy of those original equipment manufacturers (OEM) suppliers and network innovation agility. No single best strategy can fit all OEM suppliers. They can choose either to be dedicated OEM service providers or to sell their own-brand products. Either strategy can be effective in terms of innovation agility. However, once the OEM manufacturing strategy has been chosen, a manufacturer should adopt an appropriate way to manage its product innovation process. A dedicated OEM supplier should emphasize manufacturing flexibility and pursue a product modularity strategy to enhance network innovation agility, while cross-functional integration is the key for successful manufacturers with own-brand products. For both dedicated OEM suppliers and own-brand ones, market orientation is essential for network innovation agility. Managerial implications and future research directions are discussed.     

Empirical relationships between some manufacturing practices and performance

Intense global competition, rapid technological changes, advances in manufacturing and information technology and discerning customers are forcing manufacturers to adopt manufacturing practices and competitive priorities that enable them to deliver high quality products in a short period of time. Identifying manufacturers’ competitive priorities and effective manufacturing practices has long been considered one of the key elements in manufacturing strategy research. This paper presents the results of a study conducted to identify some of the effective manufacturing practices that have a significant influence on manufacturing performance. This study also identifies the main competitive objectives of manufacturing industries that participated in the study. The results reported in this paper are based on data collected from a survey using a standard questionnaire administered to 1000 manufacturers in Australia. Evidence indicates that product quality and reliability are the main competitive factors for manufacturers and price has become surprisingly a relatively less important factor. Results show that simultaneous pursuit of advanced quality practices can neutralize the potential negative impacts of manufacturing difficulties and significantly improve product quality and manufacturing performance. Failure mode and effect analysis (FMEA) is shown to be an important tool for improving product quality and on time delivery performance. FMEA practice driven by the intention to improve customer satisfaction is more effective than that practised to fulfil customer requirements. Effective supplier relationships are shown to contribute positively to the manufacturing performance. The results also suggest that maintaining a supplier rating system and product data management and regularly updating them with field failure and warranty data are important manufacturing practices.     

Supply chain models with corporate social responsibility

Currently, corporate social responsibility (CSR) has become a critical issue because more than 88% of consumers think companies should try to achieve their business goals while improving society and the environment. This paper focuses on a CSR supply chain where an Original Equipment Manufacturer’s (OEM’s) sales can be significantly reduced because of its oversea supplier’s social misconduct. Specifically, as in a conventional wholesale price contract the supplier determines its wholesale price and the OEM decides its order quantity, but in a CSR supply chain, the supplier can autonomously change its CSR cost once a minimum requirement is satisfied. A higher CSR cost means that the supplier invests more in its corporate social responsibility and the OEM’s sales will be less likely to be influenced by negative CSR events. The equilibrium solutions show an important dilemma – although the supplier’s profit increases in the basic CSR requirement, the supplier will always use the minimum CSR cost under the conventional wholesale price contract, which eventually leads to a low supply chain profit. Thus, we introduce two different contracts to handle this problem: the flexible quantity contract and the wholesale price incentive contract, which are, respectively, a ‘tough’ way and a ‘beneficent’ way for the OEM to solve the problem. Although the two ways cannot (always) coordinate the supply chain, we show that they both will significantly improve the supply chain performance. Our results also show that in some conditions, one strategy will dominate, whereas in different conditions the other strategy dominates.     

Forecasting errors and the value of information sharing in a supply chain

The paper investigates the impact of forecasting errors and information sharing on the performance of a supply chain. It also examines the impact of forecasting errors on the value of information sharing between retailers and a supplier. Analyses of the simulation outputs show that while information sharing can bring tremendous benefits to the supplier and the entire supply chain, it hurts the retailers under most conditions. Demand pattern and forecasting error distributions faced by the retailers significantly influence the magnitudes of the cost savings as a result of information sharing. The expected bias in forecast errors has a much more significant impact on supply chain performance and the value of information sharing than the standard deviation of forecasting errors and its pattern of deterioration over time. A slight positive bias in the retailer's forecast can actually increase the benefit of sharing information for the supplier and the entire supply chain. However, it can also increase the cost for retailers. The demand pattern faced by retailers also significantly influences the impact of forecasting accuracy on the value of the information sharing. These findings will motivate companies to share information, and will help to design incentive schemes to encourage information-sharing and justify investment in information-sharing projects. The findings can also be used to minimize the negative impact of forecasting errors on supply chain performance.     

Retailer’s sourcing strategy under consumer stockpiling in anticipation of supply disruptions

We study a retailer’s sourcing strategy under consumers’ stockpiling behaviour and the factors associated with the selection of an optimal strategy in multi-tier supply chains in the presence of supply disruption risk. Stockpiling behaviour occurs when consumers attempt to mitigate the negative impact of a supply shortage. We prove that those behaviours become stronger if consumers have experienced similar problems before and weaker as more inventories are hoarded. Based on these findings, numerical analysis is carried out to compare the superiority of single sourcing versus dual sourcing from retailer’s perspective. Our results suggest that the superiority is highly dependent on factors such as supplier’s volume flexibility, retailer’s purchasing price, and supplier reliability.     

Supplier selection under risk of delivery failure: a decision-support model considering managers’ risk sensitivity

This paper studies the problem of supplier selection and order allocation in a retail supply chain (comprising suppliers, a central purchasing unit and outlets) under disruption risk. The final demand is deterministic. Suppliers are located in different geographic areas, and supplies are subject to a positive probability of disruption. Different capacity and failure probabilities for each supplier are considered. Our analysis focuses on the insurance versus profitability trade-off faced by a supply manager who buys from suppliers for the outlets. Instead of determining optimal decisions given an objective function and the risk sensitivity of the decision-maker, we use a mixed integer linear programming approach to provide decision-making support that shows a supply manager the ‘elasticity of (expected) losses versus (expected) profits’. Under this model, and depending on the profit-and-loss targets, a supply manager of known risk sensitivity (i.e. risk aversion and loss aversion) can make better decisions when choosing suppliers. Moreover, taking into account, the impact of the share of fixed costs that must be covered by the operation, we consider the net values of expected profit and loss. We discuss the potential influence of the level of the firm’s fixed costs on the supply strategy. In particular, we show how the minimum value of the gross margin needed for the strategy’s profitability affects that strategy. A numerical application is conducted to illustrate the contribution of our decision-making support mechanism, and several managerial insights are obtained.     

The impact of collaborative transportation management on demand disruption of manufacturing supply chains

This paper describes the impact of collaborative transportation management (CTM) on the performance of manufacturing supply chains using a multi-agent approach. Two supply chain models (with and without CTM) are proposed to show how it realises the real operational interactions between different supply chain partners under demand disruption. Simulation results of the proposed models reveal the evolution of the CTM supply chain with demand disruption. The dynamic delivery ability and order point which are caused by demand disruption in the CTM supply chain are investigated. The results indicate that CTM can significantly reduce costs and improve the flexibility of companies in handling demand disruption problems. It is suggested that CTM is an efficient mechanism to manage supply chains, especially under a demand disruption environment.     

Omnichannel retail operations with ship-to-store and ship-from-store options under supply disruption

Omnichannel retailing strategies are widely used in practice and have been extensively studied in recent years, but few studies have explored omnichannel retailing operations in response to supply disruption in the post-pandemic era. To fill this gap, this study explores whether the adoption of omnichannel fulfillment options (i.e., ship-from-store and ship-to-store options) can mitigate the risk of supply disruption in a supply chain where a retailer orders products from a reliable supplier and a risky supplier, respectively. Under the omnichannel retailing strategy, the retailer’s order quantity from the risky supplier may increase or decrease while that from the reliable supplier may increase. Interestingly, it is possible to achieve a win–win–win outcome when the supply disruption risk is high and the market share of the channel offered by the risky supplier is low. Moreover, the entire supply chain benefits from the omnichannel retailing strategy even if it faces a high level of disruption risk.     

Developing a resilient supply chain through supplier flexibility and reliability assessment

In this study, we examine the optimal allocation of demand across a set of suppliers in a supply chain that is exposed to supply risk and environmental risk. A two-stage mixed-integer programming model is used to develop a flexible sourcing strategy under disruptions. Our model integrates supplier selection and demand allocation with transportation channel selection and provides contingency plans to mitigate the negative impacts of disruptions and minimise total network costs. Finally, a numerical example is presented to illustrate the model and provide insights. The findings suggest that developing contingency plans using flexibility in suppliers’ production capacity is an effective strategy for firms to mitigate the severity of disruptions. We also show that flexibility and reliability of the suppliers and regions play a significant role in determining contingency plans for during disruption. Findings generally show that highly flexible suppliers receive less allocation, and their flexible capacity is reserved for disruptions. For firms that do not incorporate risk management into supplier selection and allocation, the recommendation is to source from fewer, more reliable suppliers with less risk of disruption. Our findings also emphasise that the type of disruption has important implications for supplier selection and demand allocation. This study highlights the supply chain risk management strategy of regionalising as a means for minimising the impact of environmental disruptions.     

The effect of ISO 9000 implementation on flow management

This study proposes an innovative flow management system that includes product (product and logistics) and process (human, information and decision) flow management. We identify three levels of ISO 9000 implementation (basic, advanced and supportive) as enablers, and operational performance as the outcome. The model was tested using the data-set collected from 133 ISO 9001 certified manufacturing companies in Australia. The results show that advanced implementation is positively related to both product and process flow management; supportive implementation is only positively related to process flow management while basic implementation has no significant effect on either product or process flow management. The results also show that both product and process flow management are positively related to operational performance. This study provides managerial guidelines for companies that wish to improve their innovation capabilities through ISO 9000 implementation and flow management. It also contributes to the ISO 9000 and flow management literature.     

An optimal ordering strategy for a third-party managed supply chain

The rapid pace of new product introduction and global sourcing of raw materials and manufacturing facilities have created a complex and fragmented supply chain. Retailers in many consumer product industries are relying on third-party supply-chain managers (SCMs) to manage the global supply chain cost-effectively with short production lead times. To meet delivery requirements, the SCM must start the production process before receiving a firm order from retailers. We assume a two-stage production process where, in stage 1, a base product is produced. In stage 2, the base product is customised. The SCM absorbs the penalties associated with over- or underestimating retailers’ demand. Hence, the SCM has to decide on (a) the optimal production quantity of the base products and (b) the number of base products to be customised without delay. We develop a profit maximisation model for this strategy using a nonlinear objective function with two decision variables and one constraint. Applying Kuhn–Tucker conditions, closed-form solutions are obtained for the two decision variables. Also, formulations are given for two additional strategies: postpone customisation of all products and produce customised products only. An example illustrates the use of our model. We also examine the impact of demand variability on the effectiveness of the three strategies. Results show that postponement may not always be the best strategy for an SCM.