levels. Manufacturing or form postponement aims at manufacturing the products one
order at a time with no preparatory work or component procurement until the
customer specifications are fully known and customer commitment is received. The goal
of this postponement strategy is to maintain products in a neutral or non-committed
status as long as possible. In an ideal situation a standard or base product is
manufactured in large quantities to obtain economy of scale while deferring the
finalization until the customer commitment. In this scenario, economy of scope is
introduced by producing the base product to accommodate a wide range of different
customers. An example of manufacturing postponement is observed in mixing paint
color at retail stores to accommodate the individual customer’s request. This strategy
not only reduces the risks of logistics malfunction but also increases the use of light
manufacturing and final assembly at logistical facilities
On the other hand, Geographical or logistical postponement focuses on response
acceleration. This strategy aims to build and stock a full-line inventory at one or more
strategic locations. Forward deployment of inventory is postponed until the customer
order is received. In an ideal situation this postponement strategy eliminates the risk
of anticipatory risk of inventory deployment while retaining manufacturing economy
scale. An example of geographical postponement is the Sears Store Delivery System. The
logistics of the appliances is not initiated till the customer order is received. An
appliance purchased on Monday can be installed at customer’s home as early as
Wednesday. And there is a possibility that the product is not manufactured until that
night or early Tuesday.
In a number of supply chains both types of postponement strategies are combined to
create a highly responsive strategy.
9. Define and illustrate cash-to-cash conversion, dwell-time minimization and
cash spin. How does supply chain strategy and structure impact each?
Cash-to-cash conversion is the time required to convert raw material or inventory
purchases into sales revenue. It is directly related to inventory turn. Its benefits are
realized by reducing and sharing risk and inventory investment. In traditional business
the benefits were enjoyed at the expense of business partners. For example, terms of 2%
net 10 meant that a prompt payment discount could be earned if the invoice is paid
within ten days from the time of delivery. In a response based system these benefits can
be shared by managing the inventory transfer velocity across the supply chain. To
facilitate such arrangements supply chain partners often use dead net pricing, which
factors discounts and allowances in the selling price. Therefore incentives of timely
payment are replaced by performance commitments at a specified net price. Managing
supply chain logistics as a continuous synchronized process also serves to reduce dwell
time.
Dwell time is the ratio of the time that an asset sits idle to the time required to satisfy
its designated supply chain mission. As an example dwell time would represent the
ratio of the time inventory is in store to the time it is moving or contributing to achieve
supply chain objectives. Dwell time can be reduced if the supply chain partners are
评论0
最新资源