Managing Customer Order Decoupling Points in Supply Chains

The concept of a customer order decoupling point (CODP) has been discussed since 1984. The CODP refers to the point in the supply chain at which a product is linked to a specific customer. Consequently, make to stock (MTS), assemble to order (ATO), make to order (MTO), purchase and make to order (PMTO), and engineer to order (ETO) all refer to different positions of the CODP. The CODP separates the operations downstream of the CODP that are based on actual customer orders from those upstream that are forecast driven. We discuss the strategic importance of the CODP and the characteristics of upstream versus downstream operations. The CODP concept is applicable to all industries, and we illustrate it with examples from the food processing and service industries. We discuss how the CODP relates to bottlenecks, the product life cycle, leagility, mass customization, modular product designs, and postponement. With respect to the differentiating features of upstream versus downstream, the CODP is an important contingency variable for many operations and supply chain management areas, including performance measurement. We conclude this chapter with a discussion on theoretical perspectives

Manufacturing facility location and sustainability: A literature review and research agenda.

(Jan Olhager), [email protected] (Ou Keywords: Corporate social responsibility (CSR), Environment, Facility location, Manufacturing, Sustainability 2 Introduction The facility location problem has been around for a long time. In general, it concerns the geographical positioning of facilities for a specific organizational entity, such as a company. As such, it is a strategic decision related to the configuration of the manufacturing network. As competition becomes global and the complexity of the environment in which companies operate is increasing, managing an integrated international network has become an increasingly important task for managers 1995) and Procter & Gamble ( The literature on facility location can be broadly classified into two areas: factor assessment and mathematical approaches. The factor assessment approach often has a focus on strategic issues in decision making and it can be generalized into four steps: (i) establish the critical success factors of the business, (ii) assess options for regional manufacturing configurations, (iii) define a number of potential sites, and (iv) rank the most suitable solutions (Reid and Sanders, 2010). Implicitly, economic performance has been the driver for selecting critical success factors. Also, the mathematical approaches are typically formulated as cost minimization and profit maximization problems; cf. e.g. Consequently, it is becoming increasingly necessary for manufacturing firms to include all aspects and dimensions of sustainability in their manufacturing facility location decisions. Even when a facility is selected locally, there is need to integrate sustainability factors to reach economic, social, and environmental benefits from local innovation and collaboration with local customers and suppliers The research literature on the combination of manufacturing facility location and sustainability is still at an early stage but growing. We first present an overview of the literature review methodology. We then present the search strategy and the classification scheme, based on a content analysis. Then, the results of the literature review are presented. Finally, we present a conceptual framework and a research agenda. Methodology The core idea with a literature review is to summarize the state of the art in the subject field, Below we discuss the key steps in conducting the literature review, in terms of (i) the search strategy, and the content analysis in terms of (ii) literature over time, (iii) literature across journals, and (iv) categorization with respect to topical areas as well as research methodologies; cf

Supply chain visibility: A Delphi study on managerial perspectives and priorities

Visibility across supply chains has been a key concern for organisations for many years, but the tools and information systems to achieve real-time visibility have not been available until recently. In response to uncertainty and complexity, advanced information and communication technologies have been explored for supply chain visibility (SCV). However, managerial perspectives are largely absent from the current literature. In response, this paper systematically documents managerial factors influencing SCV and information that should be collected and shared among supply chain partners for better visibility. A multi-stage Delphi analysis was conducted with 26 supply chain experts from various globally recognised enterprises with manufacturing units located worldwide. The results provide details on prioritised managerial perspectives and experiences within (1) factors affecting SCV (drivers, enablers, challenges and contingencies), (2) SCV content (supplier, internal and customer information) and (3) implications of SCV (capabilities and performance effects). One observation was that forecasting is not deemed as important due to severe disruptions in supply chains. Real-time visibility for better predictability emerged as the top priority. This study is among the few that empirically explores factors influencing supply chain visibility and generates new insights into why barriers can be difficult to overcome in complex supply chain settings

Supply chain visibility for improving inbound logistics: a design science approach

Supply chain visibility (SCV) has been gaining recognition in recent years as a key factor for achieving analytical capabilities and improving supply chain performance. However, levels of SCV implementation lag behind current technological advances. This research was motivated by the lack of visibility in inbound logistics, which limits the possibility of managing deviation, in particular concerning changes in arrival time of incoming goods, in large industrial firms. We addressed this problem by adopting a design science approach. In particular, we followed context–intervention–mechanism–outcome (CIMO) logic to map and analyse material and information flows. The problems areas were successively translated via business and functional requirements into technological solutions. We evaluated alternative technologies using controlled experiments that mimicked real-life situations. This study provides guidance for manufacturing companies aiming to enhance deviation management and predictive capabilities by improving visibility in their inbound logistics and potentially extending visibility to other areas, such as internal and outbound fl

Relocation of Nordic Manufacturing

Manufacturing industries have had an important role in the export-driven economies of the Nordic countries. Manufacturing companies from these countries have increasingly been moving production abroad in recent years. However, backshoring of previously offshored manufacturing is attracting growing attention among researchers and policy-makers. This phenomenon, and its consequences for the renewal of manufacturing, are yet little understood.The research project “Reshoring of manufacturing (ROaMING): Disruptive Technologies, Business Ecosystems and Performance Information as Key Enablers” focused on increased understanding of production relocation trends in the Nordic countries, Denmark, Finland, and Sweden. The aim was to create in-depth knowledge on the status of and potential for relocating manufacturing as a source of renewal of the manufacturing sector. The research approach consisted of quantitative and qualitative parts utilizing both available databases and new data collected through a large-scale survey and case research.The report consists of five main content chapters. First, the survey results of offshoring and backshoring trends in the Nordic countries Denmark, Finland, and Sweden are presented. Then we discuss the use of financial information in decision-making regarding manufacturing offshoring and backshoring. Thereafter the results of a study on manufacturing innovations and the adoption and implementation of new manufacturing technologies are reported. The fourth chapter presents the results of a study involving two manufacturing companies on the role of business ecosystems in manufacturing relocation decisions. Finally, the fifth chapter explores the global production investments made during the period 2005-2015 by large manufacturing firms with headquarters in Denmark, Finland, and Sweden.The results among the Nordic manufacturing firms indicate that offshoring is clearly more common than backshoring. The manufacturing relocations by Nordic firms are geographically wide-ranging. The most important regions for offshoring and of backshoring are Eastern and Western Europe, the Nordic countries, and China. Offshored production is typically cost focused, whereas production relocated to the Nordic countries is relatively complex and technology-intensive, seeking access to technology, skills and knowledge, and proximity to R&D and product development. Movement of production is expected to continue both offshore and back. The reinforcement of the Nordic countries as a strong base for high value-adding manufacturing firms can be influenced by policy measures and future research.Policy implications, as well as future research proposals are noted as the result of this study. Cost competitiveness in the Nordic countries needs to be ensured in relation to their reference group in the competition. This also exerts pressure for continuous productivity improvements through technological advances and process improvements. Access to skills, knowledge and technology are important factors for Nordic manufacturers to relocate production. Therefore product, process and supply chain innovation, as well as colocation of R&D and production, need to be promoted. Policy-makers need to pay attention to maintaining the Nordic innovation systems. Many firms seem to lack a clear strategy or analytical capabilities for manufacturing location decisions. Expertise on managing global manufacturing networks should be enhanced. Follow-up on the extent, drivers and benefits of production relocations of the Nordic manufacturing firms is needed to enhance the fact-based understanding of the longer-term trend of manufacturing relocations

Strategic positioning of the order penetration point.

Abstract The order penetration point (OPP) defines the stage in the manufacturing value chain, where a particular product is linked to a specific customer order. Different manufacturing environments such as make-to-stock (MTS), assemble-toorder (ATO), make-to-order (MTO) and engineer-to-order all relate to different positions of the OPP. These may be considered as product delivery strategies, having different implications for manufacturing objectives such as customer service, manufacturing efficiency and inventory investment. Furthermore, the OPP may differ between products and over time for a particular manufacturing firm. In this paper, the positioning of the OPP is treated from a strategic perspective. Market, product, and production factors are identified that affect the OPP positioning and the shifting of the OPP upstream or downstream in the manufacturing value chain. The major factors are demand volume and volatility, and the relationship between delivery and production lead times. These factors are included in a model that allows the manufacturing firm to choose the right product delivery strategy. Different manufacturing strategies must be developed for pre-OPP operations (i.e. upstream; forecast-driven) vs. post-OPP operations (i.e. downstream, customerorder-driven), since these two stages are fundamentally different. As a consequence, a manufacturing firm that has an ATO product delivery strategy must differentiate between MTS operations (upstream the OPP) and MTO operations (downstream the OPP). For example, the competitive priorities differ: price for pre-OPP operations but delivery speed and flexibility for post-OPP operations. Therefore, decision categories, such as production planning and control, and performance measurement must be designed accordingly. Guidelines are provided for this strategic choice.

Evolution of operations planning and control: from production to supply chains

The focus of operations planning and control for manufacturing firms has expanded successively over the last 50 years. New principles, techniques, and systems have emerged that have allowed for new approaches. The perspective for planning and control has expanded from internal production operations to supply chain operations linking suppliers, manufacturers, and customers. In this paper, we take a historical perspective identifying the key trends and focus shifts in the evolution of planning and control, from shop floor control through material requirements planning (MRP), master production scheduling (MPS), and sales and operations planning (S&OP) to supply chain planning (SCP)