Article ID: | iaor1998820 |
Country: | United States |
Volume: | 43 |
Issue: | 1 |
Start Page Number: | 40 |
End Page Number: | 53 |
Publication Date: | Jan 1997 |
Journal: | Management Science |
Authors: | Lee Hau L., Tang Christopher S. |
Keywords: | design, marketing |
Expanding product variety and high customer service provision are both major challenges for manufacturers to compete in the global market. In addition to many ongoing programs, such as lead-time reduction, redesigning products and processes so as to delay the point of product differentiation is becoming an emerging means to address these challenges. Such a strategy calls for redesigning products and processes so that the stages of the production process in which a common process is used are prolonged. This product/process redesign will defer the point of differentiation (i.e. defer the stage after which the products assume their unique identities). In this paper, we develop a simple model that captures the costs and benefits associated with this redesign strategy. We apply this simple model to analyze some special cases that are motivated by real examples. These special cases enable us to formalize three different product/process redesign approaches (