The purpose of the thesis was to develop a method that simplifies the analysis between reduction of delivery lead time and inventory costs, when the reduction of delivery lead time is achieved through repositioning of the customer order decoupling point.

Purpose - The purpose of this study is to investigate potential for and cost related impact of internal lead time reduction through coordination between materials supply and a production activity of customer-order-unique products. In order to achieve the purpose two questions are answered; 1. How can with respect to sourcing strategy, coordination between materials supply and production activity of customer-order-unique products be achieved? 2. How does a coordination affect cost items in related areas of the business? Method – Based on literature in the area of materials supply a theoretical framework for the study was established. The company JELD-WEN, an industrial manufacturer with customer-order-unique-production of fire- and safety-doors was used for a case study. Data collection was performed through interviews, observations and document studies. A comparison between the theoretical framework and empirical data generated the final results. Findings – Using a hybrid sourcing strategy, changes in materials supply through an internal call-off together with the materials feeding method kitting proves potential to reduce the internal lead time in the manufacturing process. An economic impact of such coordination with a production activity has been found for three cost items; handling cost (increase), administrative order cost (increase/decrease) and inventory carrying cost (increase/decrease). Implications – The study does not contribute to new theory in the field. Instead existing theory and relations defined in the theoretical framework have been verified by the case study. Internal lead time reduction identified in the study may be used in other ways than by the means of an improved customer offer. This can be done through sharing time to other time-exposed activities in the manufacturing process or as an additional safety time for finished products to secure company's delivery accuracy. Therefore, in a decision situation for change affected cost items should be assessed in contrast to the more indirect value of a lead time reduction. Limitations – Modifications of materials supply occurs in a context where conditions outside the unit of analysis plays a crucial role and thereby limits the possible usage of the potential lead time reduction. The study handles impact of cost items in a general direction (increase or decrease). Absolute terms contribute to more precise consequences and are probably necessary to support a company's final financial decision of using an alternative approach in materials supply.

Master’s Thesis in Logistics and Supply Chain Management _____________________________________________________ Title:                 Postponement in Retailing Industry- A case study of SIBA Authors:         Ahmed Kemal & Naqvi Syed Mohammad Tutor:               Helgi Valur Fredriksson, Dr. Date:               May, 2010 Key Words:   Speculation, Postponement, Customer Order Decoupling point, Retailing, Supply Chain Flexibility, Agility ______________________________________________________________ Abstract Problem: Today's business environment is characterized by changing customer demands, increasing cost pressures on retailers, shorter product life cycles and products becoming obsolete shortly after their introduction. The above factors make it difficult for electronics retailers to balance the costs of dealing with excessive inventory and not be out of stock. To be competitive, retailers should delay some of their activities until customer demand becomes visible. This brings us to the phenomenon of postponement. Electronics market in Sweden faces continuous growth, although at a declining rate. This is indicative of a saturation that this sector, as a whole, is approaching to. The above problems are due to the speculative approaches and standardized products policies that are in practice. Loss of sales and customers result from these practices. The current study analyses the importance of postponement strategy and the benefits it offers. This study also tries to explore the potential solutions for retailers that postponement may relate to.   Purpose: The scope of this study is to identify possible postponement strategies needed for SIBA. Method: A case study approach has been taken. The choice of the method is qualitative with an inductive approach. This involved personal communications during interviews with the managers of SIBA, using semi structured questions to collect data.   Results: The concepts of postponement, supply chain flexibility, agility and customer order decoupling points (CODP) are closely related to one another and it has been shown that as the depth of postponement increase from right to left in the CODP continuum, the CODP changes its position, moving along the CODP continuum from right to left and towards the upstream. With this movement, the flexibility and agility in the chain increases. Our finds suggest that postponement is rather underutilized and that wastes (by way of lost sales and customers, obsolete inventory costs and storage costs) in the retailing process occur due to speculative approaches in application at the retail level. We have suggested logistics postponement for two out of three product categories and enumerated the ensuing benefits that the retailer can derive by way of enhanced flexibility, agility and reductions in wastages and satisfied customers.

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.

The thesis study reveals that the position of bottleneck is a significant importance in supplychain process. The modern supply chain is characterized as having diverse products due tomass customization, dynamic production technology and ever changing customer demand.Usually customized supply chain process consists of an assemble to order (ATO) or make-to-order (MTO) type of operation. By controlling the supply constraints at upstream, a smoothmaterial flow achieved at downstream. Effective management on operational constraint willresults in speed up customer delivery. A throughout evaluation of demand constraints isnecessary to gain the competitive benefits over the entire market. The study is based on a conceptual model, comprises of engineer to order (ETO), MTO, ATOand make to stock (MTS) separated by decoupling point. All these represent the particularprocess in supply chain. The important perspective of this study is that the constraints areallocated in particular part of supply chain, which will become the supply chain moreversatile. This thesis study explains the use of detail capacity and material planningtechniques in upstream, midstream and downstream of the customer order decoupling supplychain. A shifting bottleneck concept has been studied in a better way, in order to keep relativestability and reduce the complexity in production management. This thesis study tries to findout some possible factors that reduce the bottleneck shifting in supply chain. This research provides the guideline about the implementation of lean, leagile and agility incustomized supply chain. Also key factors are discussed which are necessary to achieve theseparadigms. Basically leagile is the mixture of both lean & agile strategies. Leagile is inclinedtowards sustaining the flow for mixed-model production. Its intent is to achieve theefficiencies in mass production, while producing a medium variety of products. The focus inleagile strategy is to gain effective control at shop floor planning, including capacity andmaterial planning systems.Different relevant aspects of standardization and customization are considered through theproduction processes. In addition to this rate base, hybrid and time phase material planningtechniques are sorted in different supply chain parts through multiple level of bill of material.

The purpose of this paper has been to describe the project manager's experience of the customer relationship in customer order projects. A qualitative interview study has been conducted in which seven project managers were interviewed. A thematic analysis resulted in four overall themes. The results showed the importance of a clear, responsive and open communication as well as a large degree of customization to meet the customer the best way as possible. The experience was also characterized by a dynamic relationship and the importance of the customer's expectations. The project manager's characteristics and experience were very important in all themes and had a significant part in establishing and maintaining customers’ trust. / Syftet med uppsatsen har varit att beskriva projektledarens upplevelse av kundrelationen i kundorderprojekt. En kvalitativ intervjustudie har använts som undersökningsmetod där sju stycken projektledare har intervjuats. Analys av materialet har genomförts med en tematisk analys där fyra övergripande teman framkommit. Resultatet visade på kommunikationens betydelse av att vara tydlig, lyhörd och öppen samt en stor grad av anpassning för att bemöta kunden på bästa sätt. Upplevelsen präglades dessutom av en dynamik i relationen och där kundens förväntningar var betydelsefulla. Projektledarens egenskaper och erfarenhet spelade en stor roll i samtliga teman och visade sig vara viktiga i att etablera och bevara kundens förtroende.

<p><strong>Abstract</strong></p><p>In fashion industry, customer demand is constantly changing. One of the main reasons is due to the time of delicate fashion awareness among the consumers, which has come into larger variety and frequent assortment changes. The changing trends in fashion industry allow researchers to get into the postponement strategy as a customized operation in order to focus on quality and flexibility. In today’s fashion market the key for success is to keep an eye on and react to the customer demand. H&M is Europe’s second largest fashion retailer in terms of sales and our work will reflect on H&M supply chain particularly. We try to figure out business strategies such as mass customization and standardization, which H&M is using in their entire supplier chain and in his different processes. Keeping this view in mind, we design our research question, which is about mass customization and standardization and we try to relate these business strategies to the postponement. We try to find out the structure and implementation of these strategies in H&M supply chain with the help of our respondent answers in our proposed questionnaire.</p><p>For this purpose, an electronic interview with the H&M senior merchandiser in Pakistan liaison office was carried out. The questionnaire contains different questions related to postponement strategy, customization, and standardization and other processes which are used in the supply chain of any fashion industry. The questionnaire consists of 22 major questions. Our research is purely qualitative. We include both types of the data; namely secondary and primary. Secondary data was collected from earlier studies of the literature and related theories of postponement, customization, and standardization and certain areas of fashion retailing, whereas primary data was collected through the electronic interview with Mr. Syed Naqeeb who is working in H&M liaison office as a senior merchandiser in Pakistan.</p><p>After receiving the questionnaire, we have tried to highlight our research questions with the help of our proposed Frame of Reference in Chapter 2. The Frame of Reference consists of theories which will help the reader to get the clear picture of fashion retailing and the related theories.</p><p>In the Analysis section, we talk about the activities of H&M and its background followed by its business concept. We define H&M SCM model and draw a figure of H&M complementarities, which we developed by the help of electronic interview. In the Conclusion part, we come to the point that customization and postponement affect fashion retailing by choosing raw material, components, and apparel accessories plus logistic management. The other aspect of our research area is standardization. After the analysis we come to know that Standardization and postponement are also used together in the supply chain of H&M, in raw material, cotton and yarn, dying, packaging and in the care instruction of labels (washing instructions).</p>

<p><strong>Master’s Thesis in Logistics and Supply Chain Management</strong></p><p><strong>_____________________________________________________</strong></p><p><strong>Title:                 Postponement in Retailing Industry- A case study of SIBA</strong></p><p><strong>Authors:         Ahmed Kemal & Naqvi Syed Mohammad</strong></p><p><strong>Tutor:               Helgi Valur Fredriksson, Dr.</strong></p><p><strong>Date:               May, 2010</strong></p><p><strong>Key Words:   Speculation, Postponement, Customer Order Decoupling point,</strong></p><p><strong> Retailing, Supply Chain Flexibility, Agility</strong></p><p><strong>______________________________________________________________</strong></p><p><strong>Abstract</strong><strong> </strong></p><p><strong>Problem: </strong>Today's business environment is characterized by changing customer demands, increasing cost pressures on retailers, shorter product life cycles and products becoming obsolete shortly after their introduction. The above factors make it difficult for electronics retailers to balance the costs of dealing with excessive inventory and not be out of stock. To be competitive, retailers should delay some of their activities until customer demand becomes visible. This brings us to the phenomenon of postponement. Electronics market in Sweden faces continuous growth, although at a declining rate. This is indicative of a saturation that this sector, as a whole, is approaching to. The above problems are due to the speculative approaches and standardized products policies that are in practice. Loss of sales and customers result from these practices. The current study analyses the importance of postponement strategy and the benefits it offers. This study also tries to explore the potential solutions for retailers that postponement may relate to.</p><p> </p><p><strong>Purpose:</strong> The scope of this study is to identify possible postponement strategies needed for SIBA.</p><p><strong>Method: </strong>A case study approach has been taken. The choice of the method is qualitative with an inductive approach. This involved personal communications during interviews with the managers of SIBA, using semi structured questions to collect data.</p><p> </p><p><strong>Results: </strong>The concepts of postponement, supply chain flexibility, agility and customer order decoupling points (CODP) are closely related to one another and it has been shown that as the depth of postponement increase from right to left in the CODP continuum, the CODP changes its position, moving along the CODP continuum from right to left and towards the upstream. With this movement, the flexibility and agility in the chain increases. Our finds suggest that postponement is rather underutilized and that wastes (by way of lost sales and customers, obsolete inventory costs and storage costs) in the retailing process occur due to speculative approaches in application at the retail level. We have suggested logistics postponement for two out of three product categories and enumerated the ensuing benefits that the retailer can derive by way of enhanced flexibility, agility and reductions in wastages and satisfied customers.</p>

<p>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.</p><p>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.</p><p>Briefly, our model states the following:</p><p>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.</p><p>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.</p><p>Customer order decoupling point uses the customer requirements and existing capabilities of the mass customization for optimizing the flexibility-productivity balance.</p>

Bakgrund – För kundorderdrivna företag lyfts vikten av att hålla en hög leveransprecision. Avsaknaden av material är något som påverkar leveransprecisionen negativt, genom att förbättra anskaffningsprocessen ökar chanserna till att köpt material inkommer när det efterfrågas. Syfte – Syftet med denna studie är att undersöka hur leveransprecisionen kan ökas genom att förbättra anskaffningsprocessen hos ett kundorderdrivet företag. För att uppnå syftet kommer följande frågeställningar att besvaras: 1. Vilka brister kan identifieras i en anskaffningsprocess hos ett kundorderdrivet företag? 2. Hur kan bristerna hanteras för att uppnå en ökad leveransprecision? Metod och genomförande – För att uppnå studien syfte och besvara de två frågeställningarna har en fallstudie utförts på ett kundorderdrivet företag. Genom litteraturstudier har ett teoretiskt ramverk skapats för att ge en djup kunskapsgrund inom området. Observationer, intervjuer och dokumentstudier har utförts på fallföretget för att samla in empiri som sedan har analyserats mot den insamlade teorin. Resultat – Studiens resultat bygger på den insamlade empirin och genomförda litteraturstudier. Resultatet visar vilka brister som författarna har identifierat inom en anskaffningsprocess som har en påverkan på leveransprecisionen ut till kunderna. Genom att besvara studiens två frågeställningar visar resultatet att bristande informationsflöde, manuell hantering, brist på rutiner och bristande helhetssyn är samtliga faktorer som har en påverkan på anskaffningsprocessen och i slutändan fallföretagets leveransprecision. Implikationer – De framtagna lösningarna bör implementeras på fallföretaget först efter det att en kartläggning av samtliga processer på fallföretaget har utförts, för att finna gemensamma utmaningar och undvika suboptimeringar. Slutsatser – Enligt författarna hänger många av de identifierade bristerna ihop med avsaknaden av en helhetssyn i anskaffningsprocessen och de ingående aktiviteterna och avdelningar hos fallföretaget. / Background – For customer-order-driven companies it is very important to maintain high delivery dependability. The lack of materials is something that affects delivery dependability negatively and by improving the procurement process the chances increases that the purchased materials are received when requested. Purpose – The purpose of this study is to examine how improving the procurement process in a customer-order-driven company can increase delivery dependability. To achieve the purpose, the following questions will be answered:1. Which areas of improvement can be identified in the procurement process at a customer-order-driven company? 2. How can the areas of improvement be handled to achieve increased delivery dependability? Method and implementation – In order to achieve the purpose of the study and answer the two questions a case study has been conducted at a customer-order-driven company. Through literature studies a theoretical framework have been created to provide a deep knowledge base in the field. Observations, interviews and document studies have been conducted at the case company to collect empirical data which then were analysed against the collected theory. Findings – The results of the study are based on the collected empirical data and performed literature studies. The results show which areas of improvement the authors have identified in the procurement process that has an impact on delivery dependability. By answering the study's two questions the result shows that a lack of information flow, manual handling, lack of procedures and lack of holistic view are all factors that have an impact on the procurement process and ultimately the case company's delivery dependability. Implications – The proposed solutions should be implemented at case company only after mapping all processes within the case company, in order to find common challenges and avoid sub-optimization. Conclusion – According to the authors depends many of the identified areas of improvement on the lack of a holistic view of the procurement process and the included activities and departments at the case company.