Postponement
Also known as: Delayed Differentiation, Late Customization, Deferred Assembly
Definition
Postponement is a supply chain strategy where final product configuration, customization, or assembly is delayed until after a customer order is received. By keeping products in a generic state longer, businesses can respond more quickly to demand while holding less finished goods inventory.
Types of Postponement
Manufacturing Postponement
- Delay final assembly or configuration
- Example: Computers assembled to order
Assembly Postponement
- Delay combining components into final product
- Example: Custom kits created from stock parts
Packaging Postponement
- Delay final packaging/labeling
- Example: Apply country-specific labels at destination
Geographic Postponement
- Delay forward positioning of inventory
- Example: Ship from central location until ordered
Benefits of Postponement
| Benefit | Description |
|---|---|
| Lower inventory | Fewer finished SKU variants |
| Reduced obsolescence | Generic stock lasts longer |
| Faster response | Customize quickly to orders |
| Better forecasting | Easier to forecast generic demand |
| Less safety stock | Aggregate inventory for variants |
Postponement Examples
Dell Computers
Build-to-order PCs assembled after customer specifies configuration
Benetton
Knit garments in undyed state, dye to match demand colors
HP Printers
Ship generic printers globally, add country-specific power cords/manuals locally
Amazon
Keep inventory generic at FCs, configure gift packaging when ordered
Requirements for Postponement
- Modular product design
- Flexible manufacturing capability
- Postponement points in supply chain
- Technology to support customization
- Strong demand visibility
Postponement Trade-offs
Advantages
- Lower total inventory
- Better demand matching
- Reduced markdowns
Disadvantages
- More complex operations
- May increase per-unit cost
- Requires investment in flexibility
- Longer order-to-delivery time
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