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ARTICLE TITLE

Zinn, Walter, "Should you assemble products before an order is received?", Business Horizons, Vol. 33, No. 2, Mar/Apr 1990, pp. 70-73.

 

ABSTRACT

Postponement is an effective distribution strategy when errors in demand forecasting are high. This strategy gives firms an opportunity to differentiate themselves from their competition by offering customers a broader assortment of products while maintaining a low investment in inventory. Labeling postponement may be considered by companies marketing a product under 2 or more brand names. An offset is the cost; labeling in smaller lots at the warehouse is more expensive than larger scale labeling at the manufacturing facility. Packaging postponement is feasible for products that are sold in different package sizes. In assembly postponement, the assembly of the product is delayed until a customer order is received. This is considered when a base product is sold in different, but similar, configurations that reflect individual customer preferences. In manufacturing postponement, materials are shipped to a warehouse facility, where manufacturing is completed to customer order.