Evaluation of postponement in the soluble coffee supply chain: A case study

This paper, through a case study, evaluates postponement as an option to improve supply chain performances in a soluble coffee manufacturer. The main focus of the paper is on the development of a numerical data-driven methodology for quantifying the benefits of postponement obtained from the total inventory reduction. Our study shows that significant cost swings are achievable by delaying the labelling and packaging processes until actual orders from retailers are known. These savings include the reduction of the cycle stock, safety stock, and obsolete stock unsold from promotional events. We also discuss the cost implications of the proposed configuration that may offset the estimated potential benefits. The methodology presented in this paper can also be used in many other supply chains, particularly in the food industry with similar environments. This paper contributes to the literature in extending the very short list of published work presenting a systematic methodology of characterising the postponement benefits in real world settings and driven by numerical data. (C) 2010 Elsevier B.V. All rights reserved.