On decoupling points and decoupling zones

Abstract

In a market with demand surplus, it is possible to compete with standard products available in finished goods inventory. Sooner or later, the products will be sold and mass production can prevail. Competition is however increasing and to strike a competitive balance between cost efficiency and market responsiveness, it is becoming ever more important to establish a competitive level of customer-order-based management (COBM). This paper outlines a framework for this management approach based on content, represented by four key decision categories, and an overview of a process for applying the content. The content is based on a generic decision-based decoupling theory that is used for deriving the decision categories; flow driving, flow differentiation and flow delimitation. The derivation of these decision categories is based on analysis of strategic lead-times. Thereafter, the decision category flow transparency is included as the fourth content cornerstone of the framework. A process is then outlined for application of the framework. A basic bill-of-material is used as an illustration of applying the framework for COBM.