Measuring the Benefits of Product Standardization and Postponement of Configuration in a Supply Chain

Abstract

A strategy for improving supply chain management is to configure products late in the supply chain and to increase commonality across products. The extreme case is configuration by customers and standardization of end products. This paper presents the concepts required to measure the performance implications of changes in the supply chain strategy. It further describes the experiences of a company that implemented such a strategy. During the implementation of this new strategy, the old and the new supply chain operated in parallel because not all customers adapted to the new processes and products at the same time. The existence of two supply chains simultaneously provides a good example of the challenges that exist in designing measurement systems that would allow a useful comparison of performance across both supply chains.