Research on Hybrid Postponement Strategies of Supply Chain

Mass customization (MC) is emerging as a competitive advantage of firms experiencing intensified competition. As a key feature of MC, postponement strategies means postponing activities in the supply chain until customer orders are received. The feasibility and viability of postponement in supply chain has been discussed from a cost minimization perspective, however, this research is based on the assumption that the customization process will take little time so that the customer can accept the extra wait time required by the postponement strategy. Taking customer wait time into consideration, this paper introduces a hybrid postponement strategy (partial postponement), which differs from total postponement in that it allows the stock of both finished goods and generic products. We evaluate three strategies — no postponement, hybrid postponement and total postponement — and analyze the conditions under which one is preferred. Finally, we discuss key factors affecting hybrid postponement in the supply chain.