Effects of product postponement on the distribution network: a case study

This case study is based on a supply network analysis conducted at 3M Company, a large multi-national company headquartered in Maplewood, Minnesota. The company has developed product colouring technology that enables product postponement. This study focuses on the development of a discrete-event simulation model and inventory management equations to accurately portray the behaviour of the proposed distribution network that supports product postponement capability. The paper describes, in detail, the modelling process in the context of this actual case study. In this study, it is shown that properly devised product postponement strategy allows for best-in-class delivery within a specified lead-time. The reasons for choosing this inventory management practice are discussed. The benefits and drawbacks of product postponement are reviewed in general terms. Simulation as a tool for analysing supply networks is developed and evaluated for its ability to support a data-driven decision process.