Using Postponed Manufacturing to Reconfigure the Supply Chain in the Desktop Personal Company Industry: The Case of Taiwan

In response to the increasing customer demands for variety and rapid delivery at acceptable cost, companies decentralize their final manufacturing into their distribution centers to serve customer. A reconfiguration of supply chain may be needed to implement postponed manufacturing, it has interactions with marketing and manufacturing. In this article, we expectantly develop an analysis concept for the supply chain reconfiguration. From Taiwan's desktop PC industry, it provides a case for creating value on OEM/ODM business through supply chain integration. So, it is seeking a new supply chain structure - the "virtual manufacturing alliance"- it through global logistics strategy combination the modularization and postponement concepts to configure the supply chain. Finally, postponement applications in global supply chains develop extension. I. Introduction Today we accept such as fact that we have recognized the necessity of considering markets from a global perspective, this trend towards global organization of both manufacturing and marketing is highlighting the critical importance of logistics and supply chain management as the keys to profitability. Three ways address by Christopher (1998) that companies have been able to implement their global logistics strategies: focused factories, centralized inventories and postponement. a. Focused factories The idea behind the focused factory is simple: by limiting the range and mix of products manufactured in a single location, the company can achieve considerable economies of scale. Such strategies can be expected to become more widespread as 'global thinking'. However a number of problems possibly can offset the production cost advantage; such as the local packs are needed with labeling in different languages or even different brand names and packages for the same product. This problem can be overcome by 'postponing' the final packaging until closer to the point of sale. b. Centralization of inventories The globalization has encouraged companies to rationalize production into fewer locations, it leads to a trend towards the centralization of inventories. To reduce total inventory, organizations have closed national warehouses and consolidate them into regional distribution centers serving a much wider geographical area. c. Postponement and localization Although the trend to global brands and products continues, it is recognized that there are still significant local differences in consumer requirements. Even within a relatively compact market like Western Europe, there are major differences in consumer tastes and languages; that could dramatically limit the success of global products. To take an advantage, postponement often requires a "design for localization" philosophy. Products and processes must be designed and engineered in semi-finished products that can be assembled, configured and finished to provide the highest level of variety to customers based on the smallest number of standard modules or components. In many cases the final finishing assembly may take place in the local market, or at a distribution centers (DC's). II. Conceptual Development and Literatures Review Due to the global competition and new business improvement approaches, decisions or change in one aspect of a supply chain network is required to change throughout the entire chain to maximize competitive advantages. Companies with global operations have encountered special challenges in designing and modifying the products and supply chain networks. Modularization is a product design approach to assemble product from a given set of standardized units to meet different requirements of end-product models and variations. Modularization is also associated with inbound logistics, because of different components is needed to assemble the final product. Postponement is a value-addition process (Bucklin 1965) for an end product that maximizes the common processing requirements shared by those products. …