An empirical study of the role of postponement application in reducing supply chain complexity

Abstract

Postponement has been identified as an important instrument for supply chain management. Complexity is a factor that has wide influence on the performance of supply chains. Although there is not a simple relationship between complexity and performance, performance can be improved through managing or reducing complexity level in many situations. Postponement often brings about changes in the configuration of a supply chain and hence has an impact on supply chain complexity. In this study, we present a tentative classification of supply chain complexity and try to establish a relationship between different supply chain complexity dimensions and postponement applications based existing studies. We then present two cases where postponement is applied in the upstream stages of supply chains in contrast to the mid- and down stream postponement applications found in existing studies. By analysing the manner in which these postponement applications influence complexity and impact on supply chain performance, we try to enrich the concept of postponement on one hand and expand the evidence of the relationship between postponement and complexity. We also try to clarify the relationship between JIT and upstream postponement.

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