Post date: Feb 13, 2011 1:45:14 PM
Postponement is a concept in supply chain management where the manufacturer produces a generic product which can be modified at the later stages when the final hand over to the customer happens. Take for example an umbrella manufacturer who does not know what will be the final demand of umbrellas of blue color. To solve this problem he produces all the umbrellas with white colors and later dye them when the rainy season comes and color demand gets clearer. This way not only he saves himself from the lost sales and less customer satisfaction but also this way he can maintain a low buffer for each color stock as he is free to use all the white umbrellas to dye them in any of the colors. Later paves way for overall gain in productivity and satisfaction.