Postponement, Mass Customization, Modularization and Customer Order Decoupling Point: Building the Model of Relationships

• Main Author: Can, Kemal Caglar
• Format: Others
• Language: English
• Published: Linköpings universitet, Institutionen för ekonomisk och industriell utveckling 2008
• Subjects: Postponement; Mass Customization; Modularization; Customer Order Decoupling Point; Manufacturing engineering; Produktionsteknik
• Online Access: http://urn.kb.se/resolve?urn=urn:nbn:se:liu:diva-11339

This paper focuses on four interrelated strategies: postponement, mass customization, modularization and customer order decoupling point. The goal of the postponement is to delay the customization as late as possible in the supply chain. It is also known as delayed differentiation. Mass customization is a relatively new term, which began to gain attention in the industry a decade ago. It was an obligatory invention as a response to the global market which becomes more turbulent day by day for the last two decades. Its goal is to produce customized products at low costs. Modularization is a common term that is used in many areas. In this study, we will focus on product architecture modularity and process modularity. Customer order decoupling point, which is also known as order penetration point, is used to distinguish the point in the supply chain where a particular product is associated to a specific order. Our target is building a model that explains how these four concepts are related. In order to achieve this, we will, first, research every concept individually; we will state the definitions, levels, benefits, enablers, success factors, drivers, etc. of the concepts. Then we will study the pair-wise relationships of these strategies. We will build our model according to the findings we have found in the literature. After building our model, we will explore it in Autoliv Electronics to see how it works in practice. Briefly, our model states the following: Modularization is an enabler of customization and it is necessary for the success of mass customization where set-up costs are critical. Product architecture modularity provides rapid assembly and cost efficiency that is required for postponement and mass customization. In addition, it is used to measure the mass customization degree according to some others. Postponement requires process modularity, and it moves the customer order decoupling point downstream in the value added material flow. It contributes the mass customization by increasing both the leanness and agility. Customer order decoupling point uses the customer requirements and existing capabilities of the mass customization for optimizing the flexibility-productivity balance.