An analysis of order fulfilment approaches for delivering variety and customisation

Abstract

The growth in product variety has been accelerating in almost all product categories over the last four decades. Providing high levels of variety and customisation is challenging for many producers. Here the range and diversity of order fulfilment approaches available to producers to respond are examined critically. A continuum of six fulfilment approaches is presented, encompassing both traditional approaches and those that have emerged more recently. The new integrated perspective focuses on how a producer can respond to provide relevant product variety and customisation. Demand-side and supply-side factors influencing the need for greater flexibility in order fulfilment systems are identified and the need to balance both is emphasised. Two specific approaches – mass customisation and open pipeline systems – are analysed in detail. The range of order fulfilment approaches is considered in the context of postponement and production system decoupling. Challenges in two sectors – the clothing sector and the automotive sector – are analysed. The factors affecting the choice of order fulfilment approach are discussed. Producers experiencing the competitive pressures to provide greater levels of variety and customisation need to consider the full range and diversity of order fulfilment approaches discussed here.

Keywords:

• order fulfilment
• product variety
• postponement
• mass customisation
• open pipeline

Acknowledgement

I would like to acknowledge the comments and insights provided by Dr Philip Brabazon on an early version of the first part of this paper.

Notes

1. MTO and BTO are often used interchangeably in the literature, although the latter is more commonly associated with complex products. For simplicity, BTO is used in the remainder of the paper.

2. MC is also of interest in many service sectors e.g. in customising in-flight catering a ‘flexible resource call-off MC’ mode noted earlier has been adopted (Chang and Jones 2007). However, this is outside the scope of the paper here.