On the placement of the customer order decoupling point

Philip Hedenstierna; Amos H.C. Ng

On the placement of the customer order decoupling point

Philip Hedenstierna^*, Amos H.C. Ng

^*Corresponding author for this work

University of Skövde

Research output: Chapter in Book or Report/Conference proceeding › Conference Proceeding › peer-review

Abstract

It is often suggested that supply chains should start working directly towards customer orders as far upstream as possible, mostly for inventory reduction reasons. However, the customer order decoupling point (CODP) cannot be pushed further upstream than customers are willing to wait. In this paper, we use a system dynamics model to show that the optimal placement of the CODP depends on the demand signal. Our findings indicate that placing the CODP downstream allows for short-term fluctuations in demand to be absorbed by the order book, leading to a stable production rate. This benefit must however be weighed against any additional safety stock a CODP placed far downstream may require.

Original language	English
Title of host publication	SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems
Subtitle of host publication	Logistics Systems and Engineering
Publication status	Published - 2010
Externally published	Yes
Event	2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering, SCMIS 2010 - Hong Kong, China Duration: 6 Oct 2010 → 8 Oct 2010

Publication series

Name	SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering

Conference

Conference	2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering, SCMIS 2010
Country/Territory	China
City	Hong Kong
Period	6/10/10 → 8/10/10

Keywords

Customer order decoupling point
System dynamics

Cite this

Hedenstierna, P., & Ng, A. H. C. (2010). On the placement of the customer order decoupling point. In SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering Article 5681729 (SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering).

Hedenstierna, Philip ; Ng, Amos H.C. / On the placement of the customer order decoupling point. SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering. 2010. (SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering).

@inproceedings{6801862f6327478c89644f14ebf03c64,

title = "On the placement of the customer order decoupling point",

abstract = "It is often suggested that supply chains should start working directly towards customer orders as far upstream as possible, mostly for inventory reduction reasons. However, the customer order decoupling point (CODP) cannot be pushed further upstream than customers are willing to wait. In this paper, we use a system dynamics model to show that the optimal placement of the CODP depends on the demand signal. Our findings indicate that placing the CODP downstream allows for short-term fluctuations in demand to be absorbed by the order book, leading to a stable production rate. This benefit must however be weighed against any additional safety stock a CODP placed far downstream may require.",

keywords = "Customer order decoupling point, System dynamics",

author = "Philip Hedenstierna and Ng, {Amos H.C.}",

year = "2010",

language = "English",

isbn = "9789623676960",

series = "SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering",

booktitle = "SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems",

note = "2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering, SCMIS 2010 ; Conference date: 06-10-2010 Through 08-10-2010",

}

Hedenstierna, P & Ng, AHC 2010, On the placement of the customer order decoupling point. in SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering., 5681729, SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering, 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering, SCMIS 2010, Hong Kong, China, 6/10/10.

On the placement of the customer order decoupling point. / Hedenstierna, Philip; Ng, Amos H.C.
SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering. 2010. 5681729 (SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering).

Research output: Chapter in Book or Report/Conference proceeding › Conference Proceeding › peer-review

TY - GEN

T1 - On the placement of the customer order decoupling point

AU - Hedenstierna, Philip

AU - Ng, Amos H.C.

PY - 2010

Y1 - 2010

N2 - It is often suggested that supply chains should start working directly towards customer orders as far upstream as possible, mostly for inventory reduction reasons. However, the customer order decoupling point (CODP) cannot be pushed further upstream than customers are willing to wait. In this paper, we use a system dynamics model to show that the optimal placement of the CODP depends on the demand signal. Our findings indicate that placing the CODP downstream allows for short-term fluctuations in demand to be absorbed by the order book, leading to a stable production rate. This benefit must however be weighed against any additional safety stock a CODP placed far downstream may require.

AB - It is often suggested that supply chains should start working directly towards customer orders as far upstream as possible, mostly for inventory reduction reasons. However, the customer order decoupling point (CODP) cannot be pushed further upstream than customers are willing to wait. In this paper, we use a system dynamics model to show that the optimal placement of the CODP depends on the demand signal. Our findings indicate that placing the CODP downstream allows for short-term fluctuations in demand to be absorbed by the order book, leading to a stable production rate. This benefit must however be weighed against any additional safety stock a CODP placed far downstream may require.

KW - Customer order decoupling point

KW - System dynamics

UR - http://www.scopus.com/inward/record.url?scp=79551509329&partnerID=8YFLogxK

M3 - Conference Proceeding

AN - SCOPUS:79551509329

SN - 9789623676960

T3 - SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering

BT - SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems

T2 - 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering, SCMIS 2010

Y2 - 6 October 2010 through 8 October 2010

ER -

Hedenstierna P, Ng AHC. On the placement of the customer order decoupling point. In SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering. 2010. 5681729. (SCMIS 2010 - Proceedings of 2010 8th International Conference on Supply Chain Management and Information Systems: Logistics Systems and Engineering).

On the placement of the customer order decoupling point

Abstract

Publication series

Conference

Keywords

Other files and links

Fingerprint

Cite this