IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v43y1997i1p40-53.html
   My bibliography  Save this article

Modelling the Costs and Benefits of Delayed Product Differentiation

Author

Listed:
  • Hau L. Lee

    (Stanford University, Department of Industrial Engineering and Engineering Management, Stanford, California 94305)

  • Christopher S. Tang

    (University of California at Los Angeles, John Anderson Graduate School of Management, Los Angeles, California 90024)

Abstract

Expanding product variety and high customer service provision are both major challenges for manufacturers to compete in the global market. In addition to many ongoing programs, such as lead-time reduction, redesigning products and processes so as to delay the point of product differentiation is becoming an emerging means to address these challenges. Such a strategy calls for redesigning products and processes so that the stages of the production process in which a common process is used are prolonged. This product/process redesign will defer the point of differentiation (i.e., defer the stage after which the products assume their unique identities). In this paper, we develop a simple model that captures the costs and benefits associated with this redesign strategy. We apply this simple model to analyze some special cases that are motivated by real examples. These special cases enable us to formalize three different product/process redesign approaches (standardization, modular design, and process restructuring) for delaying product differentiation that some companies are beginning to pursue. Finally, we analyze some special theoretical cases that enable us to characterize the optimal point of product differentiation and derive managerial insights.

Suggested Citation

  • Hau L. Lee & Christopher S. Tang, 1997. "Modelling the Costs and Benefits of Delayed Product Differentiation," Management Science, INFORMS, vol. 43(1), pages 40-53, January.
    • Handle: RePEc:inm:ormnsc:v:43:y:1997:i:1:p:40-53
    DOI: 10.1287/mnsc.43.1.40
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.43.1.40
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.43.1.40?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:43:y:1997:i:1:p:40-53. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.