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Evaluation of postponement in the soluble coffee supply chain: A case study

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  • Wong, Hartanto
  • Potter, Andrew
  • Naim, Mohamed

Abstract

This paper, through a case study, evaluates postponement as an option to improve supply chain performances in a soluble coffee manufacturer. The main focus of the paper is on the development of a numerical data-driven methodology for quantifying the benefits of postponement obtained from the total inventory reduction. Our study shows that significant cost savings are achievable by delaying the labelling and packaging processes until actual orders from retailers are known. These savings include the reduction of the cycle stock, safety stock, and obsolete stock unsold from promotional events. We also discuss the cost implications of the proposed configuration that may offset the estimated potential benefits. The methodology presented in this paper can also be used in many other supply chains, particularly in the food industry with similar environments. This paper contributes to the literature in extending the very short list of published work presenting a systematic methodology of characterising the postponement benefits in real world settings and driven by numerical data.

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  • Wong, Hartanto & Potter, Andrew & Naim, Mohamed, 2011. "Evaluation of postponement in the soluble coffee supply chain: A case study," International Journal of Production Economics, Elsevier, vol. 131(1), pages 355-364, May.
    • Handle: RePEc:eee:proeco:v:131:y:2011:i:1:p:355-364
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    References listed on IDEAS

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    1. Li, Jian & Edwin Cheng, T.C. & Wang, Shouyang, 2007. "Analysis of postponement strategy for perishable items by EOQ-based models," International Journal of Production Economics, Elsevier, vol. 107(1), pages 31-38, May.
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    Cited by:

    1. Weskamp, Christoph & Koberstein, Achim & Schwartz, Frank & Suhl, Leena & Voß, Stefan, 2019. "A two-stage stochastic programming approach for identifying optimal postponement strategies in supply chains with uncertain demand," Omega, Elsevier, vol. 83(C), pages 123-138.
    2. Chung Yeh & Yu-Tang Lee, 2016. "Designing Pre-Reaction Production Mechanism for Traditional and Postponed Dyeing in Apparel Supply Chain," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 13(02), pages 1-20, April.
    3. Trigeorgis, Lenos & Tsekrekos, Andrianos E., 2018. "Real Options in Operations Research: A Review," European Journal of Operational Research, Elsevier, vol. 270(1), pages 1-24.
    4. Saghiri, Soroosh S. & Barnes, Stuart J., 2016. "Supplier flexibility and postponement implementation: An empirical analysis," International Journal of Production Economics, Elsevier, vol. 173(C), pages 170-183.
    5. Benhamou, Latifa & Giard, Vincent & Khouloud, Mehdi & Fenies, Pierres & Fontane, Frédéric, 2020. "Reverse Blending: An economically efficient approach to the challenge of fertilizer mass customization," International Journal of Production Economics, Elsevier, vol. 226(C).
    6. Juan Pineiro-Chousa & Marcos Vizcaíno-González, 2020. "A mathematical model for the role of third party funding in reputation building of academic institutions," Review of Managerial Science, Springer, vol. 14(2), pages 365-377, April.
    7. Pineiro-Chousa, Juan & Vizcaíno-González, Marcos, 2016. "A quantum derivation of a reputational risk premium," International Review of Financial Analysis, Elsevier, vol. 47(C), pages 304-309.

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