Skip to main content
SpringerLink
Log in

Reconfiguring Variety, Profitability, and Postponement for Product Customization with Global Supply Chains

  • Conference paper
  • First Online:
Managing Complexity

Part of the book series: Springer Proceedings in Business and Economics ((SPBE))

  • 2866 Accesses

Abstract

At present, many industrial companies offering high product variety focus on systematically reducing the complexity of their product range and business processes. Related challenges are often named to increase time to market, reduce the effectiveness in product development, and lower process efficiency. For manufacturers with global supply chains, additional uncertainties arise in defining the right manufacturing strategy with respect to production location and postponement. To better understand related managerial implications, this chapter discusses a case study of a global manufacturer providing customized industrial applications. In particular, the study investigates the relationships between product variant profitability and manufacturing strategy relative to postponement and location. The results indicate that an improved configuration of these factors through substitution and supply chain redesign significantly increases the overall product portfolio profitability.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution

Institutional subscriptions

References

  1. ElMaraghy, H., Schuh, G., ElMaraghy, W., Piller, F., Schönsleben, P., Tseng, M., Bernard, A.: Product variety management. CIRP Ann. Manuf. Technol. 62, 629–652 (2013)

    Article  Google Scholar 

  2. Piller, F.T., Moeslein, K., Stotko, C.M.: Does mass customization pay? An economic approach to evaluate customer integration. Prod. Plan. Control 15(4), 435–444 (2004)

    Article  Google Scholar 

  3. Salvador, F., Forza, C.: Configuring products to address the customization-responsiveness squeeze: a survey of management issues and opportunities. Int. J. Prod. Econ. 91, 273–291 (2004)

    Article  Google Scholar 

  4. Hoole, R.: Five ways to simplify your supply chain. Supply Chain Manag. Int. J. 10, 3–6 (2005)

    Article  Google Scholar 

  5. Serdarasan, S.: A review of supply chain complexity drivers. Comput. Ind. Eng. 66(3), 533–540 (2013)

    Article  Google Scholar 

  6. Åhlström, P., Westbrook, R.: Implications of mass customization for operations management: an exploratory survey. Int. J. Oper. Prod. Manag. 19, 262–275 (1999)

    Article  Google Scholar 

  7. Blecker, T., Abdelkafi, N., Kaluza, B., Friedrich, G.: Controlling variety-induced complexity in mass customisation: a key metrics-based approach. Int. J. Mass Custom. 1(2–3), 272–298 (2006)

    Article  Google Scholar 

  8. Bozarth, C.C., Warsing, D.P., Flynn, B.B., Flynn, E.J.: The impact of supply chain complexity on manufacturing plant performance. J. Oper. Manag. 27(1), 78–93 (2009)

    Article  Google Scholar 

  9. Mentzer, J.T., Dewitt, W., Keebler, J.S., Min, S., Nix, N.W., Smith, C.D., Zacharia, Z.G.: Defining supply chain management. J. Bus. Logist. 22(2), 1–25 (2001)

    Article  Google Scholar 

  10. Lamothe, J., Hadj-Hamou, K., Aldanondo, M.: An optimization model for selecting a product family and designing its supply chain. Eur. J. Oper. Res. 169(3), 1030–1047 (2006)

    Article  Google Scholar 

  11. Trentin, A., Salvador, F., Forza, C., Rungtusanatham, M.J.: Operationalising form postponement from a decision-making perspective. Int. J. Prod. Res. 49(7), 1977–1999 (2011)

    Article  Google Scholar 

  12. Makhija, M.V., Kim, K., Williamson, S.D.: Measuring globalization of industries using a national industry approach: empirical evidence across five countries and over time. J. Int. Bus. Stud. 28, 679–710 (1997)

    Article  Google Scholar 

  13. Kumar, N., Andersson, D., Rehme, J.: Logistics of low cost country sourcing. Int. J. Logist. Res. Appl. 13, 143–160 (2010)

    Article  Google Scholar 

  14. Kusaba, K., Moser, R., Rodrigues, A.M.: Low-cost country sourcing competence: a conceptual framework and empirical analysis. J. Supply Chain Manag. 47, 73–93 (2011)

    Article  Google Scholar 

  15. Kumar, S., Arbi, A.S.: Outsourcing strategies for apparel manufacture: a case study. J. Manuf. Technol. Manag. 19, 73–91 (2008)

    Article  Google Scholar 

  16. Fredriksson, A., Jonsson, P.: Assessing consequences of low-cost sourcing in China. Int. J. Phys. Distrib. Logist. Manag. 39, 227–249 (2009)

    Article  Google Scholar 

  17. Horn, P., Schiele, H., Werner, W.: The ‘ugly twins’: failed low-wage-country sourcing projects and their expensive replacements. J. Purch. Supply Manag. 19(1), 27–38 (2013)

    Article  Google Scholar 

  18. Duray, R.: Mass customization origins: mass or custom manufacturing? Int. J. Oper. Prod. Manag. 22(3), 314–328 (2002)

    Article  Google Scholar 

  19. Rudberg, M., Wikner, J.: Mass customization in terms of the customer order decoupling point. Prod. Plan. Control 15(4), 445–458 (2004)

    Article  Google Scholar 

  20. Caron, F., Fiore, A.: ‘Engineer to order’ companies: how to integrate manufacturing and innovative processes. Int. J. Proj. Manag. 13(5), 313–319 (1995)

    Article  Google Scholar 

  21. Kusiak, A.: Integrated product and process design: a modularity perspective. J. Eng. Des. 13(3), 223–231 (2002)

    Article  Google Scholar 

  22. Mikkola, J.H.: Management of product architecture modularity for mass customization: modeling and theoretical considerations. IEEE Trans. Eng. Manag. 54(1), 57–69 (2007)

    Article  Google Scholar 

  23. Forza, C., Salvador, F., Trentin, A.: Form postponement effects on operational performance: a typological theory. Int. J. Oper. Prod. Manag. 28(11), 1067–1094 (2008)

    Article  Google Scholar 

  24. Neely, A., Gregory, M., Platts, K.: Performance measurement system design: a literature review and research agenda. Int. J. Oper. Prod. Manag. 25(12), 1228–1263 (2005)

    Google Scholar 

  25. Ulrikkeholm, J.B., Hvam, L.: The cost of customising: assessing the performance of a modular product programme. Int. J. Prod. Dev. 19(4), 214–230 (2014)

    Article  Google Scholar 

  26. De Toni, A., Caputo, M., Vinelli, A.: Production management techniques: push-pull classification and application conditions. Int. J. Oper. Prod. Manag. 8(2), 35–51 (1988)

    Article  Google Scholar 

  27. de Koster, R., Le-Duc, T., Roodbergen, K.J.: Design and control of warehouse order picking: a literature review. Eur. J. Oper. Res. 182, 481–501 (2007)

    Article  Google Scholar 

  28. Cooper, J.C.: Logistics strategies for global businesses. Int. J. Phys. Distrib. Logist. Manag. 23, 12–23 (1993)

    Article  Google Scholar 

  29. Schuh, G., Sauer, A., Doering, S.: Managing complexity in industrial collaborations. Int. J. Prod. Res. 46(9), 2485–2498 (2008)

    Article  Google Scholar 

  30. Pareto, V., Schwier, A.S.: Manual of political economy. Augustus M. Kelley, New York (1971). p. 504

    Google Scholar 

  31. Brynjolfsson, E., Hu, Y.J., Simester, D.: Goodbye Pareto principle, hello long tail: the effect of search costs on the concentration of product sales. Manag. Sci. 57(8), 1373–1386 (2011)

    Article  Google Scholar 

  32. Yücel, E., Karaesmen, F., Salman, F.S., Türkay, M.: Optimizing product assortment under customer-driven demand substitution. Eur. J. Oper. Res. 199(3), 759–768 (2009)

    Article  Google Scholar 

  33. Gualandris, J., Kalchschmidt, M.: Product and process modularity: improving flexibility and reducing supplier failure risk. Int. J. Prod. Res. 51(19), 5757–5770 (2013)

    Article  Google Scholar 

  34. Labro, E.: The cost effects of component commonality: a literature review through a management-accounting lens. Manuf. Serv. Oper. Manag. 6(4), 358–367 (2004)

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Engineering Management, Technical University of Denmark, Produktionstorvet Building 426–030F, 2800, Kgs. Lyngby, Denmark

    Martin Bonev, Anna Myrodia & Lars Hvam

Authors
  1. Martin Bonev
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Anna Myrodia
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Lars Hvam
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Martin Bonev .

Editor information

Editors and Affiliations

  1. Department of Management & Technology, University of Quebec at Montreal, Montreal, QC, Canada

    Jocelyn Bellemare

  2. Department of Management & Technology, University of Quebec at Montreal, Montreal, QC, Canada

    Serge Carrier

  3. Department of Mechanical and Manufacturing Engineering, Aalborg University, Aalborg, Denmark

    Kjeld Nielsen

  4. Technology and Innovation Management, RWTH Aachen University, Aachen, Germany

    Frank T. Piller

Rights and permissions

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 2.5 International License (http://creativecommons.org/licenses/by-nc/2.5/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

The images or other third party material in this chapter are included in the chapter's Creative Commons license, unless indicated otherwise in a credit line to the material. If material is not included in the chapter's Creative Commons license and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder.

Reprints and permissions

Copyright information

© 2017 Springer International Publishing Switzerland

About this paper

Cite this paper

Bonev, M., Myrodia, A., Hvam, L. (2017). Reconfiguring Variety, Profitability, and Postponement for Product Customization with Global Supply Chains. In: Bellemare, J., Carrier, S., Nielsen, K., Piller, F.T. (eds) Managing Complexity. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-29058-4_2

Download citation

Publish with us

Policies and ethics

Search

Navigation