Even in the same field, due to the different functions and capabilities of products, a product series will have multiple product models. These different types of products reflect the different needs of different market segments, such as business, education, individuals or government departments. Therefore, it is not uncommon for a product family to have an extremely large number of products. In addition, with the acceleration of technology update, enterprises must produce multiple versions to meet different upgrade requirements, which are helpful to realize the urgent need of mass customization.
Market globalization, diversification of customers' needs and acceleration of technological updating are the fundamental reasons for the sharp increase in product categories. This "surge" has brought about multiple negative effects. First of all, it is impossible for forecasters to predict the demand of multiple versions. For high-tech products such as computers and their peripherals, the prediction error often exceeds 400%. Forecast errors lead to over-prediction of some versions of products and over-prediction of other versions of products, which leads to over-inventory of some products and out-of-stock of others. Secondly. Under the pressure of maintaining a certain level of customer service, many operation managers only choose a simple way to deal with it in advance-store as many finished products as possible for emergencies. Due to the rapid technical update, the inventory written off and invalidated due to scrapping every year is often counted as tens of millions or even hundreds of millions of yuan. In addition, another negative effect brought by the surge in product categories is that enterprises need high management fees to manage a large number of product supplies. The high complexity of product supply also means high manufacturing cost, because more specialized technology, materials, preparation conversion means and quality assurance methods are needed. At the same time, because different products need different on-site support materials and technologies, it will be more difficult to maintain effective overall product support or high-level customer on-site service.
In order to solve the above operational problems, enterprises have invested a lot of resources to improve the efficiency of supply chain. These investments include: establishing an information network, which can reduce the delay of processing theorem table information; Use rapid means of transportation, including special vehicles; Re-establish the factory to be closer to customers; Use more complex forecasting techniques; Establish a complex supply chain inventory management system; Use all kinds of efficient factory automation equipment to transfer and process materials. These measures have achieved varying degrees of success.
In recent years, we have seen an increasing trend, that is, to redesign products and processes to improve the negative impact of product categories. Child et al. (199 1) found that 80% of manufacturing cost, 50% of quality, 50% of processing time and business complexity are all affected by product and process design. Therefore, a strategy of "re-designing products and processes to delay the differences between multiple products as much as possible", that is, the so-called "delay" strategy came into being. In other words, "delay" means that WIP will not be transformed into a specific finished product by using a specific process before a certain point downstream of the process (difference point).
On the one hand, the surge of products makes operators face great challenges and pressures, on the other hand, it also contains great opportunities for product and process design and even supply chain design. Implementing appropriate delay strategy can improve the flexibility of supply chain, reduce costs, improve efficiency and improve customer service level.
Second, the concept, content and types of extension
The concept of "delay" was first put forward by Alderson (1950) in the article "Marketing Efficiency and Delay Principle". He defined delay as a marketing strategy, that is, delaying the change of form and characteristics as much as possible. This concept is widely used in logistics and logistics practice. The consumer goods industry is also using this concept to quickly respond to customer orders. For example, Benetton stores undyed clothes until the beginning of the sales season, when more information about customer preferences can be obtained. Other clothing companies, such as Obermeyer, which makes ski suits, use similar strategies.
We believe that delay is to delay the decision to make a specific product and differentiate it until the start of production by designing products and production processes. The method of distinguishing one or a series of delayed products into specialized finished products is called delayed product differentiation. Generally speaking, multiple products can enjoy some of the same processes and/or parts at the initial stage of the production process, and semi-finished products can be customized at some point or some points in the process flow, so that a common product will become different finished products until this point in the process flow. This is usually a product difference. The essence of delay is to redesign products and processes to delay product differences. In the following discussion, the "degree" of delay refers to the relative position of product differences. In this way, the early delay means that product differences occur in the early stage of the supply chain, and the late delay means that differences occur in the late stage of the supply chain.
Ho Lee proposed several important methods to realize delay difference.
1. Process reconfiguration (or reordering). That is to modify and adjust the production process or steps of products, so that the differentiated production process of specific products can be delayed as much as possible.
The delay strategy of reconstructing supply chain comes from: graduating from paper network for free.
2. Generalization. It refers to the use of common parts or processes to reduce the complexity of products and processes and improve the flexibility of WIP inventory.
3. Modularization. Refers to the decomposition of a complete product into modules that are easy to assemble together, and various functions are put into each module in the design stage.
4. standardization. In other words, to replace a product series with a standard product, one of the ways to achieve standardization is to establish several alternatives that may be needed by specific customers.
In the environment of high-tech product manufacturing and distribution, it is of universal significance to describe the process of various products with the following structure: consider a product supply chain mainly composed of five stages. (1) manufacturing industry; (2) integration; (3) customization; (4) localization; (5) packaging. The order of these stages is consistent with most of the examples we usually see. At the same time, this order also happens to be in descending order, which corresponds to the amount of engineering resources that need to be processed and debugged.
(1) manufacturing refers to the basic stage of the production of the core part of the product. Usually only a single general product or a small number of products are produced at this stage.
(2) Integration refers to the stage of combining the core part of the product with key components. For example, in printer production, the printer engine and body are produced in the manufacturing stage, and the printed circuit board is added to the engine in the integration stage. Each product becomes a different product version and a different component combination in the integration stage.
(3) Customization refers to further assembling products with different accessories to form products with obvious differences. For example, for computer products, different input/output cards, software, memories and accessory boards are loaded to form different finished products.
(4) In the localization stage, localization measures should be taken to meet the localization requirements of different countries and regions. For example, different countries have different requirements for power supply, and the instructions require different languages and use different packaging materials. It is conceivable that more and more different final products will be produced after products are localized in different countries and regions.
(5) Finally, packaging is another stage that further leads to a sharp increase in some product categories.
In the context of the sharp increase in product categories, as a strategy to delay product differences, there are two forms of delay: time delay and formal delay.
Time delay refers to the task of product differentiation, including manufacturing, integration, customization, localization, packaging, etc., which is postponed as much as possible. The time lag makes the inventory production mode change to the order production mode.
Experience tells us that there is an important opportunity in the implementation time delay, which is related to the geographical location of the implementation of differentiated tasks. Generally speaking, the task of differentiation can be implemented in factories, regional distribution centers, distribution channels and even customers. Very early delay means that all differentiation tasks are implemented in the factory, while very late delay means that all differentiation tasks are implemented at the customer's place.
In the global market, for most high-tech and complex products that are traditionally manufactured and assembled in factories, the first opportunity to delay (that is, to complete differentiated tasks in manufacturing factories) is to transfer some differentiated tasks to regional distribution centers. Because the delivery time from the factory to the distribution center takes several weeks, the time of product difference is delayed by several weeks, which finally saves a lot of inventory backlog and shortage costs caused by forecasting errors. Ho Lee, Billington and Carter (1992) reported a case of HP desktop printer in which the localization phase from the factory to the distribution center was delayed. This "design for localization" strategy has become the principle of action of HP.
Another type of delay, formal delay, aims to achieve standardization in the upstream stage as much as possible. This process is accompanied by the standardization of parts. In the form delay, it may be the product form delay or the process form delay. At the same time, two delay forms may exist at the same time, forming different combinations. In this way, product differences will be effectively delayed. At present, the continuous improvement of modularity and component standardization makes the design delay difference more feasible. For example, in the case of HP printers, two key components used in the integration phase distinguish products into black-and-white and color printers. If some key components are standardized, there will be no difference between the two printers in the integration stage, which will lead to delay. In short, formal delay can be regarded as a process of breaking the branches of the original product category tree and making them less. This process is shown in Figure 2.
"Design for delay" is such a concept, which requires the redesign of products and processes in order to achieve time delay or formal delay in a low-cost and efficient way.