Postponement & Decouple Point In Supply Chain

744 words - 3 pages

The decoupling point method is linked with material flow pipeline. Still, to better supply chain, materials flow needs to be aligned with information flow within the chain.
According to Christopher ( 1992) the supply chain currently fight for competitiveness based on raising consumer requirements not companies. Postponement is about delaying operations in the supply chain till real changes in the marketplace are on hand. It is now a supply chain strategy impacting new thinking around product &, process design including supply chain management
Decoupling point (DP). this is also called order penetration point. It is a level where contingency order tie in to real consumer orders in ...view middle of the document...

Review of the old and new manufacturing process in Benetton. The marketing & production handling is premised primarily on color and this DP is really situated at the dyeing process. Conventionally the yarn is first dyed into different colors and so knitted into completed garments, this produces many garments in colors users do not need yet required colors are out of stock. knitting garments and postponing dyeing till a later arrangement - when they get accurate order information brings about stock reduction, improved customer service and fewer write offs .(Lee et al 1998)
* Avoidance of cost, waste and obsolescence -It means that some steps which come before the points of differentiation is extended till strategic stock is confirmed at point of product differentiation - the best location for DP. Companies should just hold products in unfinished state at the initial product differentiation points until consumer orders arrive.
Dangers:
- Decoupling through postponement generates additional cost to alter production process sequence, material flow and pattern design.
- carrying out postponement often brings about relocation of ad hoc stock holding, production activities and skills management to more competent members of the supply chain resulting to new challenge of control for the system.
- Execution of postponement encourages outsourcing to third parties. Care should be taken to avoid outsourcing of core competence as this could put a firm out of business. Gillette’s razors postponed packaging to meet many of their...

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