Staged Postponement of Order Specification Commitment for Supply Chain Management

Postponement of order commitment, particularly product differentiation, has been generally accepted as an effective measure in supply chain management. With the volatile market fluctuation and rapid changes in product technology, the timing for committing product specifications becomes very important to buyers and producers alike in improving the overall supply chain efficiency. This paper reports research results in developing a systematic approach to decide the selection of product attributes and timing of staged commitment to improve responses to customer requirements. The approach starts with categorizing attributes and aggregation of processes to reduce the complexity. A mathematical model incorporating capacity, interlocking and sequential constraints are built to identify the optimal commitment schema. An industrial case is prepared to illustrate the research result.