Form Postponement: a Decision-Making Perspective

Operations management literature defines form postponement as the deferment of product differentiation activities through changes in the architecture and/or the manufacturing and distribution process of a product family. We contend that when form postponement is meant to reduce the risk and associated costs of specifying the wrong mix of product variants, it is more appropriately defined as the deferment of production planning decisions. We elaborate on this concept, proposing a notion of form postponement from a decision-making perspective, and develop an operational procedure to identify and quantify all opportunities for form postponement relative to a given product family. We demonstrate that each potential for form postponement can be divided in two components, one related to the forecasting and master scheduling process and the other related to product and/or process redesign. We empirically illustrate the fact that the former component, usually neglected in the literature, can account for more than 50 % of the total potential for form postponement within a product family. We conclude by setting directions for future decision-making research on form postponement. Keywords: Form postponement, product variety management, production planning and control