Johnny wan

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Postponment

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Johnny wan

  1. 1. Postponement StrategyIn Supply Chain Management Johnny WAN 22nd March 2006
  2. 2. 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
  3. 3. 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.
  4. 4. The story begins…While I was having my MPhil thesis viva,At the end, one panel member suddenlypointed at a bottle of mineral water infront of him and asked me
  5. 5. “Mr. Wan, what postponement strategyhas been used for making this bottle ofwater?” Let’s think about it…
  6. 6. Presentation Outline1. 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?
  7. 7. 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?
  8. 8. A postponement strategy aims atdelaying some supply chain activitiesuntil customer demand is revealed inorder to maintain both low systemwidecost and fast response.
  9. 9. First suggested by Alderson in 1950 Followed by Bucklin in 1965 Became popular since 1990s (Lee, van Hoekand Yang)
  10. 10. A supply chain Forecast driven information Demand driven information purchasing manufacturing storage & delivery X X X Physical product flow Monetary flow
  11. 11. 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?
  12. 12. Four Major Strategies 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
  13. 13. Purchasing Postponement Demand driven information purchasing manufacturing storage & delivery X Physical product flow
  14. 14. Purchasing postponement Delay purchasing of some expensive and fragile materialsManufacturing postponement Products in semi-finished forms and can be customized quickly in production facilitiesLogistics postponement Products in semi-finished forms and can be customized quickly in production facilities close to customersTime postponement Finished products are kept in central location and are distributed quickly to customers
  15. 15. Manufacturing Postponement Forecast driven Demand driven information information purchasing manufacturing storage & delivery X Physical product flow
  16. 16. Purchasing postponement Delay purchasing of some expensive and fragile materialsManufacturing postponement Products in semi-finished forms and can be customized quickly in production facilitiesLogistics postponement Products in semi-finished forms and can be customized quickly in production facilities close to customersTime postponement Finished products are kept in central location and are distributed quickly to customers
  17. 17. Logistics Postponement Forecast driven information Demand driven information storage, light manufacturing & purchasing manufacturing delivery X Physical product flow
  18. 18. Purchasing postponement Delay purchasing of some expensive and fragile materialsManufacturing postponement Products in semi-finished forms and can be customized quickly in production facilitiesLogistics postponement Products in semi-finished forms and can be customized quickly in production facilities close to customersTime postponement Finished products are kept in central location and are distributed quickly to customers
  19. 19. Logistics Postponement Forecast driven information Demand driven information purchasing manufacturing storage & delivery X Physical product flow
  20. 20. 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
  21. 21. 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?
  22. 22. Reduce inventory costReduce transportation costReduce risk of obsolescenceReduce demand variabilityImprove competitiveness by offeringcustomized products quickly
  23. 23. 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?
  24. 24. Requirements High product variety Modular and standardized product design Flexible manufacturing system Real time information and communication Fast response logistics Strategic supplier relationship
  25. 25. 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)
  26. 26. Option 1: Time Postponement + Traditional Chinese peripherals Hong Kong Traditional + Chinese peripherals Taiwan + Japanese peripherals Japan Simplified + Chinese peripherals China Finished product stored in any one location
  27. 27. Option 2: Manufacturing/logistics Postponement Traditional + Chinese peripherals Hong Kong System + Traditional Chinese peripherals Taiwan + + Japanese peripherals Japan + Simplified Chinese peripherals China
  28. 28. Option 3: Purchasing Postponement Hong Kongpurchase make assemble deliver
  29. 29. 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?
  30. 30. Germany (Automobile) Japan (Electronics) Japan (Automobile) US (E-commerce) US (Computer) Italy (Fashion) US (Breaker Manufacturing) US (Printers) Sweden (Furniture) US (Storage Devices) US (Semiconductors)
  31. 31. 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?
  32. 32. 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
  33. 33. informationmodularity logistics Capabilities of a company suppliermanagement FMS Choose the Competitive Organizational right strategy Advantage performance
  34. 34. 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
  35. 35. information logisticsmodularity FMS Capabilities of a company suppliermanagement ? ? ?
  36. 36. The story ends…“Mr. Wan, what postponement strategyhas been used for making this bottle ofwater?”I replied“Is it the postponement of getting mydegree?”
  37. 37. In order not to let the history repeatitself, your comments are valuable. Thank you. Email: cljw2@cam.ac.uk

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