Introducing a customer order decoupling zone in logistics decision-making

Abstract

The general aim of this paper is to explore the properties of the so-called customer order decoupling point (CODP) to enhance the knowledge and understanding of its possible use in operations and logistics. More specifically, the purpose is to enhance the applicability of the CODP framework so that it also covers scenarios with a gradual increase in certainty concerning information about customer demand. Differentiating between decisions made under certainty and decisions made under uncertainty of customer demand has been identified as a key issue in operations strategy and supply chain management. The CODP identifies this distinction but the concept is limited in that it assumes either total uncertainty or total certainty concerning customer demand. Acknowledging a gradual increase in certainty across multiple independent dimensions provides a point of departure for extending the decoupling point to a decoupling zone. Based on the decoupling zone, we extend the established framework for positioning the CODP and identify eight key decisions related to the decoupling zone that concern positioning, fulfilment strategies and buffer sizing.