Some weeks ago, Consultant Gabriel Cruz commented on the effects of the Brazilian economic crisis on companies' inventory costs. Factors such as the drop in demand, the increase in sales forecasting errors and the increase in the basic interest rate have caused the opportunity cost associated with keeping inventories to increase considerably, becoming one more concern for companies in this difficult time. that the country lives. In this scenario, a practice of optimizing the flow of the logistics process can help companies to reduce the need for inventories and face this challenge. It's about the postponement or, as it is known in Portuguese, postponement.
O postponement consists of postponing as much as possible any displacement and/or final configuration of products and services in the supply chain, that is, the order is to wait for the completion of the product/service until the exact moment when the customer's order is defined. The idea behind this principle is to avoid building up inventories for a wide variety of products by postponing activities that create variety until the latest possible moment.
The practice has been known in the academic literature since the 50s, but reports of success cases emerged with greater intensity in the 90s. One of the most famous success cases comes from Dell. The build-to-order personal computer manufacturer practices delay when configuring microcomputer systems according to variations in customer requests for available models. Thus, it keeps a stock of a few models and configures the system after the customer's request, offering a wide variety of options to the market, without affecting its stocks.
Another example comes from the Italian clothing brand Benetton. Known worldwide for the strong and contrasting colors of its clothing line, Benetton does not dye its products when they are manufactured. The products are, in fact, transported and stored in gray (neutral background), receiving the final dyeing shortly before being taken to the stores. This procedure allows the company to reduce costs and improve the level of service perceived by the customer, since the probability of having spare parts in unwanted colors or missing those that are demanded each week by customers is considerably reduced.
Figure 1 – The Benetton brand is famous for its brightly colored clothes
Source: Design Scene
A Suvinil, a national paint manufacturer, can be pointed out as one of the first applications of postponement in Brazil. The company's process is based on the production of 3 to 5 bases of paint in the factory and the composition of colors is carried out at the point of sale, through the electro-electronic tinting machine, where the formula is programmed with the perfect dosage of dyes according to the color specified by the consumer. With 16 pigments it is possible to reach around 2.000 colors. This procedure allows Suvinil to obtain much more accurate sales forecasts, since the company only needs to forecast the quantity of paint cans sold in the month for each of the approximately 5 bases and not for each of the 2.000 different colors offered.
In research promoted by ILOS with Brazilian companies and published in Panorama ILOS – Supply Chain Planning 2015, it was possible to perceive the adhesion of companies from different segments to the practice of Postponement. Companies in the chemical and petrochemical sector stood out as the biggest supporters of the practice (83%) in the country, followed by the electronics and automotive sectors. Among all the companies asked in the survey, only 46% stated that they incorporated postponement into their production strategy.
Figure 2 – Companies that incorporate the postponement to the production strategy
Source: Panorama ILOS – Supply Chain Planning 2015
As the research indicates, the postponement still has a lot of room to grow in the country. The use of the postponement strategy allows companies to increase the accuracy of their sales forecasts, since the modularization of products makes it possible to the forecast of consolidated series, easier to forecast. In addition, the company can maintain a much smaller inventory of products, without this implying a reduction in the level of service. On the contrary, the postponement often allows companies to offer even more options to the customer and, mainly, greater availability of the products that he really wants, avoiding the stranding of items caused by sales below the planned of a certain product.
With the growing demand for mass customization, it is expected that more and more companies will adopt the postponement into your business process, getting to the point of organizations use 3D printers to manufacture the product when customer demand occurs. This is the postponement taken to the limit, and which seems to be the reality of the future. For the present, reducing inventory levels and logistical costs is already a huge advantage!
References
<https://ilos.com.br/web/juros-e-recessao-inimigos-do-custo-de-estoques/>
<https://ilos.com.br/web/analise-de-mercado/relatorios-de-pesquisa/planejamento-no-supply-chain/>
SAMPAIO, M. The strategic power of postponement. Thesis (Doctorate in Administration) – School of Administration of the State of São Paulo, Getúlio Vargas Foundation, São Paulo. 2003.http://bibliotecadigital.fgv.br/dspace/bitstream/handle/10438/2536/86624.pdf?sequence=2&isAllowed=>
Inventory Management ILOS Online Course
Supply chain management / Eduardo Magalhães… [et al.] – Rio de Janeiro: Editora FGV, 2013.
Fernanda Monteiro
More than 11 years of experience in training and consultancy projects, focusing on Logistics and Supply Chain. In consultancy, he carried out projects such as Transformational Logistics Plan, Diagnosis of logistics operations, Strategy and Calendarization of Transport Operations, Measuring the Cost of Serving, Market Study, Mapping of Inventory Reduction Opportunities, Review of the S&OP Process, Management Plan Training and Implementation of Commercial Processes in companies such as Nestlé, Raia Drogasil, Ipiranga, Lojas Americanas, B2W, Coca-Cola, Andina, Embraco, Martins Atacado, Loja do Mecânico, Santo Antônio Energia, Ecoporto and Silimed. She is currently one of the teachers of the Inventory Management Course taught every six months by ILOS. She worked on the development and management of Online Courses in Logistics and Supply Chain, Supply Processes, Demand Planning, Inventory Management and Industrial Management. Still in the training area, she was responsible for applying ILOS business games in companies such as Raia Drogasil, Fibria, NEC, Novartis and Moove.
