Framework

Customer-order decoupling point

The question it answers

When customers want faster delivery but stock keeps growing, at which stage should an operations manager stop working to forecast and start working to real orders?

Origin
Hoekstra and Romme (1992), as presented in Lysons and Farrington (2020) ch. 4
Diagram type
Process by phase
Level of analysis
Firm
Topics
Supply chain & operations
Delivery lorry pulling a chain of linked glass boxes, icon for supply chain

Diagram

Customer-order decoupling point

  1. Order-driven
  2. Purchase to orderShipbuilding, house building
  3. Make to orderSteel
  4. Assemble to orderPersonal computers
  5. Forecast-driven
  6. Make to stockPetrol
  7. Deliver to warehouse or point of salePetrol-station sandwiches, seasonal fashion

Sources

References

Listed A–Z by author surname, Harvard style. A source with a DOI links to https://doi.org/…; one without links to its page or says plainly that it has no DOI.

  1. Hoekstra, S. and Romme, J. (1992) Integral Logistic Structures: Developing Customer-Oriented Goods Flow. London: McGraw-Hill.No DOISource page
  2. Lysons, K. and Farrington, B. (2020) Procurement and Supply Chain Management (10th edn). Harlow: Pearson.No DOISource page