2. Introduction
Coined in 1985, by Hoekstra and Romme
Widely used in Production and manufacturing fields
Main content of research topics on postponement strategies
Concept emerged to structure the value streams of different
product-market combinations with regards to role of stock points.
These points are vital in optimizing Supply chain.
3. Defining CODP
Traditionally defined as the point in the value chain for a product,
where the product is linked to a specific customer order.
The point at which demand changes from independent to
dependent. It is the point at which the firm becomes responsible for
determining the timing & quantity of material to be purchased made,
or finished.
It’s the last point at which inventory is held.
The CODP divides operations stages:
forecast-driven (upstream of CODP)
Customer order driven (the CODP and downstream).
4. Positioning Inventory in Supply Chain
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Make to Stock
Assemble to Order
Make to Order
Engineer to Order
Raw Material Components Semifinished Finished
Forecast Order
5. Upstream of CODP
Goods flow control upstream of the CODP is forecast-driven
form of "push" where the release of work is governed by forecasts &
assumptions about status of shop floor
Lead Time increases from M-T-S to E-T-O
Downstream of CODP
Activities in the goods flow are planned and controlled based upon
actual customer orders
Order-driven being equivalent to “working in pull flow"
Lead time impacted is impacted by customer
6. Types of Firms
(on Manufacturing situation)
Make-to-stock(MTS) firms: Firms that serve customers from finished
goods inventory. It includes all options regarding keeping inventory in
the distribution system; either at distributors, wholesalers or retailers.
Product is produced to stock with respect to the form.
Assemble-to-order(ATO) firms: Firms that combine a number of
preassembled modules to meet a customer’s specifications. A primary
task is to define a customer’s order in terms of alternative components
since these are carried in inventory
Make-to-order(MTO) firms: Make the customer’s product from raw
materials, parts, and components. It is selected for special products
with wide range and low individual product volume per period.
Engineer-to-order (ETO)firm: Firm that will work with the customer to
design and then make the product.
7. Sector Companies Market
Type
CODP Comment
Automobile
Honda ATO Semi finished Multiple levels of
supplier. Accessories &
assemblies as per
product.Bajaj ATO Semi finished
Aircraft
Boeing MTO
Components,Raw
Material Heavy finished product,
with complex assembly
Airbus MTO
Components, Raw
Material
Food
(Packaged)
Nestle MTS Finished
Standard sizes of end
product & forecast driven
Parle Agro MTS Finished
Pharmaceuticals
Sun Pharma MTS Finished The demand is sporadic
& with intense standards,
regulations.Alkem MTS Finished
Market Types & CODP
8. Sector Companies Market
Type
CODP Comment
FMCG
Emami MTS Finished
Standard sizes of end
product & forecast driven
Marico MTS Finished
Cement
Ultratech MTS Finished
No variation in end
product, high demand.
ACC Ltd MTS Finished
Construction
GMR Group MTO, ATO Raw Material
Many OEMs used with
engineered approach
Gammon India MTO, ATO Raw Material
Textile
Arvind Mills MTS Finishes Demand is high & driven by
Brands. Very less customer
part.Raymond Ltd MTS Finished
9. New trend in CODP
With increasing in Customized end product, more focus on shifting
CODP in upstream. Like In Cars, apparels, eatables, consumer goods
more flexibility on customer side.
Investing in research creating a methodology for defining the
“optimal” position of CODP for a closer and mutually beneficial
cooperation with the customers.
Service companies also focusing on CODP to improve customer
satisfaction.
CODP typology is used as a foundation for developing a reliable
order promise process for mass customizers.
