A Dynamic Approach to Measure the Effect of Postponement Strategy on the Performance of Manufacturing and Logistics Processes

Abstract

The current dynamic business environment dominated by competition between supply chains, factors such as the increase in demand variability, the proliferation of product variety, the process and supply uncertainty and the increased complexity of manufacturing and logistics networks are crucial in the increasingly globalized competitive arena. One way to meet this challenge is to use of postponement as a strategy to delay the point of product differentiation on space and time along the supply chain. This strategy has been increasingly used as an important tool for supply chain management. Thus, this article aims to present a dynamic method and a set of attributes and metrics to measure and evaluate the effect of postponement on the performance of manufacturing and logistics processes. Subsequently, the method has been applied in a case study on a Brazilian industrial company, considering two different scenarios, represented by total anticipated demand in space and time (decentralized inventory/make-to-stock) and the total demand postponement in space and time (centralized inventory/make-to-order).