Engineering and production decoupling configurations: An empirical study in the machinery industry

Abstract

Engineer-to-order supply chains are traditionally considered to perform all engineering and production activities based on specific orders. However, in practice, some engineering and production activities can be speculatively undertaken to reduce the delivery lead time, thus leading to a range of decoupling configurations for both engineering and production processes. The literature rarely addresses this issue, mainly focusing on either the production or the engineering dimensions, which opens a gap between theory and practice. The purpose of this study is to reduce this gap and assess the potential impact of a unique two-dimensional customer order decoupling point (2D-CODP) framework that is inclusive of all the individual literature studies and to evaluate the managerial approaches employed in the different decoupling configurations. To achieve this aim, research using multiple case studies is conducted in the machinery industry. The key results flowing from the empirical analysis are the identification of 4 clusters of decoupling configurations chosen by the different cases and the classification of the managerial approaches employed in the specific decoupling configurations. The main contribution of this paper is that it adds insight regarding the debate on engineer-to-order definitions. Additionally, this paper enriches existing knowledge regarding the contingencies that drive the application of different managerial approaches upstream and downstream of the CODP. Finally, this paper provides cases that exemplify how to use the 2D-CODP framework, guiding managers in understanding the positioning of the product families and choosing how to manage and coordinate activities upstream and downstream of the CODP based on their positioning.