Decoupling for supply chain competitiveness

Purpose - To exploit the benefits from locating the material flow decoupling point (DCP) of the supply chain. Design/methodology/approach - Describes the DCP as the location where items of stock are stored as a deliberate part of supply strategy, and as a particularly effective technique where modularisation is an integral part in achieving mass customization. Illustrates some well-established standard alternative locations for the DCP, covering a wide spectrum of delivery strategies ranging from buying materials-to-order right through to complete manufacture. Explains that the DCP signifies the boundary between push tasks and pull tasks, and that delaying final manufacture and/or delivery by exploiting the DCP can facilitate the availability of goods to the end customer at reasonable cost and within a reasonable time, and limits the danger of product obsolescence. Uses the example of bespoke fashion garments and personalized computers to illustrate that, respectively, the optimum location of the DCP would be inventories close to the end customer, and towards the sales end of the manufacturing process where modules are withdrawn from stock and immediately assembled. Maps the material DCP on to Pagh and Cooper's (1997) postponement matrix to demonstrate the location of make-to-stock, deliver-to-order, make-to-stock, and finalise-to-order strategies. Demonstrates how the DCP can be exploited in a lean/agile supply chain. Contends that the DCP is an essential feature of modern delivery pipelines and a critical component in pipelines delivering high variety at economic cost. Originality/value - Explains the DCP concept and the opportunities that can be gained from its effective positioning