Postponement in Retail Supply Chain Management : A systematic data gathering survey

Abstract: Postponement as a tool of creating flexibility is not a new concept. It traces back in literature to the 1950’s but was mainly argued as a method useful for manufacturing. However, postponement could potentially be used in all different parts of an organization to delay certain activities, and thereby create flexibility, which is crucial in today’s volatile marketplace. Customers are requiring customized products, yet they are not willing to pay premium for processes involved. Also, competition is increasing, as retailers around the globe compete with each other due to internet and improved information systems. This study focuses on a retailer’s perspective in the supply chain, as previous studies mainly discuss manufacturers, and their different abilities of achieving flexibility. Supply chain management as a concept are discussed, which is described as an integrative approach to dealing with the planning and control of the materials flow from suppliers to end users. This will further be “extended” to demand chain management, where focus lies at customers’ demand and puts emphasis on the needs of the marketplace and identifies the roles and tasks to be designed in the supply chain to satisfy these needs, instead of starting with the supplier/manufacturer and working forward. This is closely connected to flexibility, and postponement as a tool to achieve this. Flexibility as such, is described as the ability to change, or adapt to customer demand. This study aims to explore the Swedish retailing business, and their use of postponement strategies. A quantitative study has been made to be able to create a general picture of their use of this tool, as well as their prerequisite for adopting this tool. This study shows that retailing in general do have adopted strategies for customizations except non-specialized stores where answers to a wide extent differed regarding their use of flexibility. However, these strategies mainly regard packaging, and/or basic customizations. Depending on the market certain retailers are active within; postponement is used in various extents. Expensive products, or customers requiring big quantities of products, are able to get these customized. Money is almost always the main concern in these adaptations. Some factors that have been studied, that were enablers of flexibility and postponement strategies, were not able to be analyzed as very low results were calculated. However, the main-factors: flexibility and postponement were able to be analyzed in detail, as well as discussions regarding the inconclusive data gathered.