Integrating production and engineering perspectives on the customer order decoupling point

Abstract

PurposeTraditionally the customer order decoupling point (CODP) has focused mainly on the separation of production performed on speculation from commitment to customer orders. Engineering has, with few exceptions in this context, simply been viewed as occurring before production activities in a sequential manner. As competition increases, customer requirements for short lead‐times in combination with customisations requires further integration of processes involving both engineering and production activities making the traditional view of the CODP insufficient in these cases. The purpose of this paper is thus to provide a more general approach to enterprise integration of cross‐functional processes in order to extend the applicability of the CODP as a logistics oriented concept.Design/methodology/approachWe use evolutionary approach to define the CODP as a two‐dimensional concept based on the integration of engineering and production.FindingsThe extended CODP captures the complexity in terms of possible configurations, but also provides a framework for the issues that must be handled when positioning the CODP in terms of both engineering and production simultaneously.Practical implicationsThe two‐dimensional CODP is an important extension to make the theory better reflect reality and hence increase the scope and acceptance of both the concept CODP per se, and the analysis based on the CODP.Originality/valueBy the introduction of a new two‐dimensional approach, a more comprehensive CODP typology is defined. We also provide a classification of customer order influence based on a combined engineering and production perspective where the efficient CODPs constitute a set providing the highest level of customer value in terms of engineering adaptations.