Johnny wan
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Transcript of Johnny wan
Postponement Strategy
In Supply Chain Management
Johnny WAN22nd March 2006
Who am I?
� Grew up in Hong Kong, China
� 1st year PhD student of the Centre for Strategy and Performance (CSP)
� Dr Ken Platts is my supervisor
� This month is my 6th month in Cambridge
Struggle
� I am struggling in building the conceptual framework
at this moment.
� Advices and comments from all of you are welcome
after the presentation.
� At any time, be my mentors.
The story begins…
While I was having my MPhil thesis viva,
At the end, one panel member suddenly pointed at a bottle of mineral water in front of him and asked me
“Mr. Wan, what postponement strategy has been used for making this bottle of water?”
Let’s think about it…
Presentation Outline
1. What is a postponement strategy?
2. What are the types of postponement strategies?
3. Why using a postponement strategy?
4. How a postponement strategy works?
5. What companies are using postponement
strategies?
6. What are my preliminary research directions?
What is a postponement strategy?
What are the types of postponement strategies?
Why using a postponement strategy?
How a postponement strategy works?
What companies are using postponement strategies?
What are my preliminary research directions?
A postponement strategy aims at
delaying some supply chain activities
until customer demand is revealed in
order to maintain both low systemwide
cost and fast response.
�First suggested by Alderson in 1950
�Followed by Bucklin in 1965
�Became popular since 1990s (Lee, van Hoek
and Yang)
A supply chain
Physical product flow
Forecast driven information Demand driven information
Monetary flow
purchasing manufacturing storage & delivery
X X X
What is a postponement strategy?
What are the types of postponement strategies?
Why using a postponement strategy?
How a postponement strategy works?
What companies are using postponement strategies?
What are my preliminary research directions?
� Purchasing postponement� Delay purchasing of some expensive and fragile
materials� Manufacturing postponement
� Products in semi-finished forms and can be customized quickly in production facilities
� Logistics postponement� Products in semi-finished forms and can be
customized quickly in production facilities close to customers
� Time postponement� Finished products are kept in central location and are
distributed quickly to customers
Four Major Strategies
Purchasing Postponement
Physical product flow
Demand driven information
purchasing manufacturing storage & delivery
X
� Purchasing postponement� Delay purchasing of some expensive and fragile
materials� Manufacturing postponement
� Products in semi-finished forms and can be customized quickly in production facilities
� Logistics postponement� Products in semi-finished forms and can be
customized quickly in production facilities close to customers
� Time postponement� Finished products are kept in central location and are
distributed quickly to customers
Manufacturing Postponement
Physical product flow
Demand driven information
purchasing manufacturing storage & delivery
X
Forecast driven information
� Purchasing postponement� Delay purchasing of some expensive and fragile
materials� Manufacturing postponement
� Products in semi-finished forms and can be customized quickly in production facilities
� Logistics postponement� Products in semi-finished forms and can be
customized quickly in production facilities close to customers
� Time postponement� Finished products are kept in central location and are
distributed quickly to customers
Logistics Postponement
Physical product flow
Demand driven information
purchasing manufacturing
storage, light manufacturing &
delivery
X
Forecast driven information
� Purchasing postponement� Delay purchasing of some expensive and fragile
materials� Manufacturing postponement
� Products in semi-finished forms and can be customized quickly in production facilities
� Logistics postponement� Products in semi-finished forms and can be
customized quickly in production facilities close to customers
� Time postponement� Finished products are kept in central location and are
distributed quickly to customers
Logistics Postponement
Physical product flow
Demand driven information
purchasing manufacturing storage & delivery
X
Forecast driven information
Other Postponement Strategies
� Product development postponement
� Delay critical product development decision
� Price postponement
� Delay the pricing decision until customer demand is known
� Postponement of passage of title
� Delay the transfer of product ownership from seller to buyer
� Demand postponement
� Split demand due to capacity constraint
What is a postponement strategy?
What are the types of postponement strategies?
Why using a postponement strategy?
How a postponement strategy works?
What companies are using postponement strategies?
What are my preliminary research directions?
� Reduce inventory cost
� Reduce transportation cost
� Reduce risk of obsolescence
� Reduce demand variability
� Improve competitiveness by offering customized products quickly
What is a postponement strategy?
What are the types of postponement strategies?
Why using a postponement strategy?
How a postponement strategy works?
What companies are using postponement strategies?
What are my preliminary research directions?
Requirements
� High product variety
� Modular and standardized product design
� Flexible manufacturing system
� Real time information and communication
� Fast response logistics
� Strategic supplier relationship
Example: A Sony PSP Supply Chain
� Products sold in Japan, HK, China and Taiwan� Total number of units sold is roughly estimated� But, the number of units sold in each location is
unknown� Products are highly modular and standardized
� Differences in� Manual and packaging (different languages)� Plugs (different sockets)
Option 1: Time Postponement
Traditional Chinese
peripherals
Japanese peripherals
Simplified Chinese
peripherals
Hong Kong
Japan
China
Taiwan
+Traditional Chinese
peripherals+
+
+Finished product stored in any
one location
Option 2: Manufacturing/logistics Postponement
Traditional Chinese
peripherals
Japanese peripherals
Simplified Chinese
peripherals
Hong Kong
Japan
China
Taiwan+
+
+
+
System
+
Traditional Chinese
peripherals
Option 3: Purchasing Postponement
Hong Kong
purchase make assemble deliver
What is a postponement strategy?
What are the types of postponement strategies?
Why using a postponement strategy?
How a postponement strategy works?
What companies are using postponement strategies?
What are my preliminary research directions?
Italy (Fashion)
Japan (Electronics)
US (Breaker Manufacturing)
Germany (Automobile)
Sweden (Furniture)
US (Semiconductors)
US (Printers)
US (Storage Devices)
US (Computer)US (E-commerce)
Japan (Automobile)
What is a postponement strategy?
What are the types of postponement strategies?
Why using a postponement strategy?
How a postponement strategy works?
What companies are using postponement strategies?
What are my preliminary research directions?
Option 1: Company Level Survey
� Collect quantitative data by sending questionnaires to a large number of target respondents
� Employ statistical techniques such as structural equation modelling or regression to confirm the causal relationship between
� Company capabilities (requirements) and different postponement strategies
� Postponement strategy and competitive advantage
� Competitive advantage and organizational performance
Capabilities of a company
Choose the right strategy
Competitive Advantage
Organizational performance
information
logisticsmodularity
supplier management FMS
Option 2: Company Level Case Study
� Collect qualitative data through participations,
interviews and observations of some selected
companies
� Explore more requirements to enable
postponement strategy implementation in
different situations
Capabilities of a company
?
information logistics
modularity
supplier management
FMS
? ?
The story ends…
I replied
“Is it the postponement of getting my degree?”
“Mr. Wan, what postponement strategy has been used for making this bottle of water?”
In order not to let the history repeat itself, your comments are valuable.
Thank you.
Email: [email protected]