A North American manufacturer of consumer goods expands its market to include Europe. Customization currently is done in the North American manufacturing facility. Which of the following new processes should the manufacturer use to eliminate inventory imbalances of customized products?
The manufacturer should use postponement to eliminate inventory imbalances of customized products. Postponement is a strategy that involves delaying the final customization of a product until customer demand is known. By waiting to customize products until specific orders are received, the manufacturer can better align production with actual demand. This reduces the risk of having excess inventory of certain customized products and ensures that production is more responsive to market needs, thereby minimizing inventory imbalances and associated costs.
B. Postponement. In this situation, the manufacturer should use postponement to eliminate inventory imbalances of customized products. Postponement is a supply chain strategy that involves delaying certain activities, such as customization, until customer demand is known. By postponing the customization process until after receiving specific customer orders, the manufacturer can better match production with actual demand, reducing the risk of inventory imbalances. This approach can help minimize excess inventory, lower carrying costs, and reduce the likelihood of obsolete products, ultimately improving supply chain efficiency and responsiveness.
Postponement