Product design from a supply chain management perspective

Abstract

The linkages between supply chain related issues and product design issues have not received much attention in literature. This paper presents a framework for supply chain strategy that integrates product design related cost and inventory costs. Postponement concept is an important supply chain strategy employed by firms to reduce inventory costs and lead-times, and to improve customer service levels. The postponement strategy is in the focus of research in the last few years and its importance is traced to the increasing trends in globalisation and product customisation. Exploitation of product modularity is an important element in the success of the postponement strategy. This paper builds on the existing concept of parts commonality index and introduces a new measure called Modularity Index, which is more comprehensive in nature. (Product Modularity, Product Design, Supply Chain Management, Postponement Strategy)