Form Postponement Research Articles

The moderating role of vendor managed inventory on the bullwhip effect in the COVID-19 pandemic

The study sought to determine the role of vendor-managed inventory and form postponement in mitigating against the bullwhip effect in the bakery industry. The bullwhip effect is referred to as demand distortions along the upstream supply chain that is caused by variances between supply and demand. The bullwhip effect was conceptualized by its indicators that are overstocking, obsolescence, and inventory holding costs. A survey of conveniently chosen 100 bakeries was conducted in the city of Harare, the capital city of Zimbabwe. The informants for individual bakeries were competent bookkeepers or qualified accountants. A factorial MANOVA and follow-up ANOVAs using the Bonferroni method were conducted. The study indicated statistically significant main effects and interaction effects for all the factors and concluded that all the indicators of the bullwhip effect can be mitigated if bakery businesses pursued either or both of the vendor-management inventory and the form postponement strategies. The managerial implications of this study were that bakery businesses can avoid the consequences of the bullwhip effect through investing in plant and equipment that enables form postponement, and strengthen the widely practiced vendor-management strategy.

Exploring risk pooling in hospitals to reduce demand and lead time uncertainty

Nearly every eighth German hospital faces an elevated risk of bankruptcy. An inappropriate use of inventory management practices is among the causes. Hospitals suffer from demand and lead time uncertainty, and the current COVID-19 pandemic worsened the plight. The popular business logistics concept of risk pooling has been shown to reduce these uncertainties in industry and trade, but has been neglected as a variability reduction method in healthcare operations research and practice. Based on a survey with 223 German hospitals, this study explores how ten risk pooling methods can be adapted and applied in the healthcare context to reduce economic losses while maintaining a given service level. The results suggest that in general risk pooling may improve the economic situation of hospitals and, in particular, inventory pooling, transshipments, and product substitution for medications and consumer goods are the most effective methods in the healthcare context, while form postponement may be unsuitable for hospitals due to the required efforts, delay in treatments, and liability issues. The application of risk pooling in healthcare requires willingness to exchange information and to cooperate, adequate IT infrastructure, compatibility, adherence to healthcare laws and regulations, and securing the immediate treatment of emergencies. Compared to manufacturing and trading companies, hospitals seem to currently neglect the variability reducing effect of risk pooling.

Postponement practices in the Brazilian Southeast wine sector

PurposeThe purpose of this paper is to investigate the application of the postponement strategy by wineries in the state of Minas Gerais (Southeastern Brazil), in order to identify the types of postponement adopted by these companies, the implementation process and the results obtained after their adoption.Design/methodology/approachTwelve exploratory case studies were conducted in wine-producing companies, as well as on-site visits and semi-structured interviews with the managers of the companies surveyed.FindingsThe adoption of form postponement was verified in the companies studied mainly for table wine production, occurring most commonly during the bottling and labeling stages.Research limitations/implicationsThis paper analyzed the application of the postponement strategy in Southeast Brazil. Future research should analyze the application of this strategy in other regions of the country and abroad.Practical implicationsThe information acquired in this research can contribute to a more adequate practical application of the postponement strategy in a little-known industry sector.Originality/valueIn addition to discussing and verifying the application of the postponement strategy in the wine industry, this research presents information to assist in its implementation, use and consolidation.

An optimized decision-making algorithm for talent supply

The paper draws on the postponement strategy applied in production management of enterprises to optimize the mode of college talent supply. The paper will establish time postponement (TP) and form postponement (FP) model for talent supply under the conditions of M/M/1 and G/G/1, and analyze the impacts of system utilization, variation of the early and late arrival time, training time variation, interest rate, the rate of using general training modules and the number of talent types on the costs and times of TP and FP strategy. The research will provide a scientific basis for colleges to make optimal strategies in talent supply.

Postponement and international transfer in global supply chains

In this paper, we develop an analytical model for form postponement in global supply chain subject to variations in international transfers and tariffs, in service levels and in deviation from a supply delivery schedule that falls within a window. We examine the benefits of postponement under the influence of these factors, and we derive the necessary conditions for a strategic choice of both the 'postponement timing', (early or delayed differentiation) and the 'decoupling points', (early or late shipping) under decoupled and non-decoupled systems. The study shows when one type of the strategies is more beneficial than the other. Our analysis indicates that the boundaries of a delivery window, the point of differentiation, the point of export, the safety factor, and the relative production cost differences across countries play an important role under postponement. We use the production of Desk Jet printers at Hewlett Packard to illustrate the applicability of this model.

Postponement adoption in manufacturers of tomato-derived products

Purpose – The purpose of this paper is to investigate the application of postponement strategies in companies that produce tomato-derived products in order to identify the types of postponement adopted by these companies, the implementation process, and the major changes after their adoption. Design/methodology/approach – Three exploratory case studies were carried out in manufacturers of tomato products, where interviews were conducted with general managers in the manufacturing and logistics sectors. Findings – The application of time and form postponement was verified in the companies studied, and the implementation of the postponement strategy led to changes in the productive process of tomato-derived products. These changes involved the movement of the decoupling point and the increase in the make-to-order production, which had positive impacts on the businesses. Research limitations/implications – This paper analyzed the application of postponement in a specific sector of the food industry. Future research must analyze the application of this strategy in other segments of the food industry and other sectors as well. Practical implications – The information acquired in this can contribute to a more adequate application of postponement in a little-known industry sector. Originality/value – In addition to further discussion on the issue and verification of postponement application in food companies, this research presents information to assist the adoption, use, and consolidation of the postponement strategy.

Postponement application in orange juice companies: case studies

Postponement can be understood as a way to change the form, identity, or location of products at the latest possible point in time and can be applied in different levels in the supply chain. This study aimed to investigate the implementation of the postponement strategy in orange juice companies in order to identify the types of postponement adopted by these companies, the implementation process and the major changes after its adoption. Three exploratory case studies were carried out in orange juice processing companies, where interviews were conducted with general managers in the manufacturing and logistics sectors. Among the findings, types of postponement (time and form postponement) were verified. With the application of this strategy, changes in the productive process of orange juice were made with the movement of the decoupling point and the increase in the make-to-order production which had positive impacts on the businesses.

Time and Form Postponement Competition under Dynamic Behavior of Demand

Time and Form Postponement Competition under Dynamic Behavior of Demand

Computers & Industrial Engineering

The form postponement (FP) strategy is an important strategy for manufacturing firms to utilize to achieve a quick response to customer needs while keeping low inventory levels of finished products. It is an important and difficult task to design a supply chain that uses FP strategy to mitigate the conflict between inventory level and service level. To this end, we develop a two-stage tandem queuing network to model the supply chain. The first stage is the manufacturing process of the undifferentiated semi-finished product, which is produced on a Make-To-Stock basis: the inventory is controlled by base-stock policy. The second stage is the customization process based on customers’ specified requirements. There are two types of order: ordinary order and special order. The former can be met by customizing from semi-finished product, while the latter must be entirely customized beginning from the first stage. The customer orders arrive according to a Poisson process. We first derive the inventory level and fill rate, and then present a total cost model. It turns out that the model is intractable due to the Poisson distribution in the objective function. To analytically solve the problem, we use normal distribution as an approximation of the Poisson distribution, which works well when the parameter of the Poisson distribution is quite large. Finally, some numerical experiments are conducted and managerial insights are offered based on the numerical results.

A two-stage queueing network on form postponement supply chain with correlated demands

To ease the conflict between quick response and product variety, more and more business models are developed in supply chains. Among these, the form postponement (FP) strategy is an efficient tool and has been widely adopted. To the supply chain with FP strategy, the design mostly involves two problems: determination of customer order decoupling point (CODP) position and semi-finished product inventory control. In this paper, we develop a two-stage tandem queueing network with MAP arrival to address this issue. Particularly, we introduce a Markov arrival process (MAP) to characterize the correlation of the demand. By using of matrix geometric method, we derive several performance measure of the supply chain, such as inventory level and unfill rate. Our numerical examples show that both the variance and the correlation coefficient of the demand lead to more delayed CODP position and more total cost.

A queuing model on supply chain with the form postponement strategy

The form postponement (FP) strategy is an important strategy for manufacturing firms to utilize to achieve a quick response to customer needs while keeping low inventory levels of finished products. It is an important and difficult task to design a supply chain that uses FP strategy to mitigate the conflict between inventory level and service level. To this end, we develop a two-stage tandem queuing network to model the supply chain. The first stage is the manufacturing process of the undifferentiated semi-finished product, which is produced on a Make-To-Stock basis: the inventory is controlled by base-stock policy. The second stage is the customization process based on customers’ specified requirements. There are two types of order: ordinary order and special order. The former can be met by customizing from semi-finished product, while the latter must be entirely customized beginning from the first stage. The customer orders arrive according to a Poisson process. We first derive the inventory level and fill rate, and then present a total cost model. It turns out that the model is intractable due to the Poisson distribution in the objective function. To analytically solve the problem, we use normal distribution as an approximation of the Poisson distribution, which works well when the parameter of the Poisson distribution is quite large. Finally, some numerical experiments are conducted and managerial insights are offered based on the numerical results.

Coping with product variety in the food processing industry: the effect of form postponement

Form postponement (FP) is an operations design approach that has been proposed in the literature as a solution for companies to handle increasing product variety and demand uncertainty. FP is possible in food, but the few authors that studied FP in food stress that food characteristics limit the benefits of applying FP. In this paper, we study how characteristics of the food processing industry affect the operational performance of implementing FP based on a case in a dairy company and a simulation model. We found that substantial operational performance improvements could be achieved when implementing FP diminishes the negative effects of some typical food processing industry characteristics. Large gains are possible in production settings with restricted batch sizes and cyclical plans that heavily influence the timing of production. However, a premise to maximise the FP benefits is that the other planning activities should match the new capabilities. Benefits are lower if the company cannot or does not adapt its organisational procedures.

Influence of value chain redesign to variety/cost balance in consumer goods industry

The growing customers’ requirements for an extended variety of products with no price premium charged are changing the competitive situation in many industries. Form postponement as one of the basic mass customisation approaches proves to be an adequate answer to the cost issues the companies are dealing with when extending variety of their products. This paper presents a research investigating the drivers of different models of form postponement. The study results indicate a relationship between a selected model of form postponement and either cost reduction or increase of external variety (i.e. level of product variety as perceived by the customers). Not every form postponement model results in equal effect to total supply chain cost reduction and increase in variety. Thus, selecting an appropriate model needs to be dealt with at a strategic managerial level.

Operationalising form postponement from a decision-making perspective

Form postponement means delaying the commitment of inventory to the final configuration of a product as long as possible. Many firms today are striving to redesign their products and/or their manufacturing and supply chain processes to implement form postponement. Opportunities for form postponement, however, are sometimes lost in the companies’ production-planning processes. By focusing on the deferring of product mix decisions in the master production scheduling process, this paper shows that form postponement opportunities can be divided into two components: one whose pursuit necessarily requires product and/or transformation process redesign, the other that can be pursued by changing the sales forecasting and master production scheduling process alone. We develop an operational procedure to identify and quantify, for a given product family, all opportunities for form postponement and their two respective components. Then, we discuss and empirically illustrate how the proposed measurement procedure may support companies in changing their decision-making routines to implement form postponement. Finally, we set future research directions on form postponement suggested by our results.

Third-party logistics providers offering form postponement services: value propositions and organisational approaches

In today's global supply chains, third-party logistics providers (3PLs) can play an important role in implementing the principle of form postponement (FP). This proposes that activities creating product variety and the associated production mix decisions are deferred along a product family manufacturing and distribution process as long as possible. While both FP and third-party logistics have increasingly drawn the attention of the academic community over the last few years, less research has been carried out on FP supported by 3PLs. The present paper empirically investigates how 3PLs can deliver value to companies offering product variety by providing FP services, defined as the carrying out of variety-creating activities on behalf of these companies close to the target markets. Our findings indicate that, through an FP service, a 3PL can give its customers two different kinds of benefits: either improved performance in serving the customer's existing markets or entry into new geographical markets. Further, our results show that through the choice of the organisational solution for FP service provision, the 3PL can increase FP value by mitigating a number of disadvantages that the customer might incur in the case of in-house implementation of FP. Challenges that the 3PL needs to overcome to actually provide these potential benefits are also identified. The paper concludes by discussing the implications of our findings for both practice and research on FP.

Design for form postponement: do not overlook organization design

PurposeThe purpose of this paper is to develop a theory of the organizational changes related to the production‐planning process that facilitate application of form postponement (FP), an increasingly popular operations‐design principle meant to alleviate the negative impact of product variety and customization on operational performance.Design/methodology/approachTo achieve the theory‐building objective, a multiple‐case study involving four cases in the machinery industry was designed. In the inductive theory‐building process, the authors borrowed from the information‐processing theory to further corroborate the internal validity and generalizability of the findings.FindingsThe theory proposed by the author indicates that greater utilization of lateral relations in the production‐planning process, higher production‐planning frequency, greater degree of self‐containment of the production‐planning task, and simplification of the production planning‐related environment favor application of FP.Research limitations/implicationsThe level of analysis of the theory is the production‐planning process of a product family within a company. Future research could extend inquiry of the organizational antecedents of FP at both higher and lower levels of analysis, such as the organization as a whole or the individuals participating in the production‐planning process.Practical implicationsThe theory supports managerial decision making by suggesting how to redesign the organization part involved in the production‐planning process of a product family in order to apply FP. The difficulty and cost of this organizational redesign effort should be taken into account when companies consider FP implementation.Originality/valuePast research has focused on changes to product design and to the manufacturing and supply chain process that enable FP. This paper augments the understanding of FP enablers by developing the first model of organizational antecedents of FP. It also responds to calls for more research integrating insights from organization theory and operations/supply chain management.

Determining product differentiation strategies under uncertain environment

Owing to product proliferation and expanding high customer service provision, firms nowadays face severe competitive challenges in globalisation. The revised process or product design often involves delaying products differentiation until later production stages. Form postponement applying fuzzy theory and mathematical programming is implemented to formulate a multi-period, multistage assembly network model with multi-product under uncertain leadtimes to find a set of optimal alternative for searching optimal differentiation plans. The inherent fuzziness involved in determination of corresponding leadtimes is handled by expected values of fuzzy numbers, and a set of crisp values of leadtimes had executed by centre of gravity defuzzification.

Assembly systems layout design model for delayed products differentiation

Frequently changing customers’ needs and market pressures motivate manufacturers to offer a wide variety of their products. Poor demand prediction and increased manufacturing complexities and managerial burdens are just a few symptoms of products variety proliferation. Applying a postponement strategy is an effective method for mitigating the complexities arising due to increased products variety and customisation. Delayed product differentiation (DPD) is a prerequisite for applying form postponement strategies, where the unique features that distinguish each product are added at the final stages of production. This paper introduces an innovative design methodology to derive and represent an assembly line schematic layout for delayed products differentiation. The proposed methodology incorporates product commonality analysis and feasible assembly sequences to synthesise the assembly line layout in a single integrated logical design framework, without pre-defining either the number or the positions of differentiation points along the line. Products commonality analysis is performed using cladistics techniques commonly used for biological classification. The classical cladistics was modified to take into consideration the precedence constraints, which are required to ensure the feasibility of assembly sequences. Real product variants are used to validate the proposed DPD assembly line layout design methodology and demonstrate its merits.

Analysis of form postponement based on optimal positioning of the differentiation point and stocking decisions

In this paper we analyse the use of form postponement based on the positioning of the differentiation point and stocking policy. Six classes of manufacturing configurations are identified based on the choice of whether or not form postponement is employed and the decision regarding the stocking policy for the final product configurations as well as for the generic component. Analytical evaluation methods based on queuing models are used to assess operational measures for each class of configuration and solution algorithms are developed to determine the optimal positioning of the differentiation point and the optimal stocking levels. This allows us to compare the relative merits of all manufacturing configurations based on their respective best performances. The results of a numerical experiment show how different operational parameters may influence the choice of optimal configuration, the preference of early or late postponement, and the relative cost savings obtained from employing form postponement.

Form postponement effects on operational performance: a typological theory

PurposeThe operational outcomes of form postponement (FP) have been increasingly investigated in the last two decades under the effects of escalating product variety and diffusion of mass customisation strategies. However, conflicting or hard‐to‐relate findings are quite frequent in the literature, so that a unifying framework for operations decision making is still lacking. The purpose of this paper is to develop a typological theory that reconciles into a coherent picture extant research on FP effects on operational performance.Design/methodology/approachThe paper defines three mutually exclusive and exhaustive types of FP at the company level of analysis. Then, it revisits, through the lens of this typology, the literature on FP and formalizes how, why and under which assumptions each FP type affects operational performance.FindingsThe paper demonstrates that, to predict and explain FP effects on operational performance, three types of FP should be distinguished. In fact, it is shown that either these FP types have different effects on a given performance dimension, or they have the same effect but the logical justification for this effect is often different according to the FP type being considered.Research limitations/implicationsThe paper's synopsis of past research accomplishments indicates that future work will have to investigate the operational implications of a specific FP type almost ignored in the literature, as well as test the relationships hypothesized in the literature. Further opportunities for future research include extending the level of analysis beyond the boundaries of the company and linking the paper's FP typology to the operations strategy discourse.Practical implicationsThe lack of understanding of the benefits and costs of FP has been found to be a major obstacle to FP implementation. The paper's typological theory supports managerial decision making by clarifying what FP alternatives companies have and what are the operational implications for each of these alternatives.Originality/valueThe paper's typological theory reconciles apparently conflicting findings in the literature by explaining such differences in terms of differences in the FP type being investigated. Additionally, the typology helps avoid a twofold risk: on the one hand, the risk of generalizing an effect or mechanism that only applies to a specific FP type and, on the other hand, the risk of failing to detect type‐specific effects or mechanisms.