Postponement and international transfer in global supply chains

In this paper, we develop an analytical model for form postponement in global supply chain subject to variations in international transfers and tariffs, in service levels and in deviation from a supply delivery schedule that falls within a window. We examine the benefits of postponement under the influence of these factors, and we derive the necessary conditions for a strategic choice of both the 'postponement timing', (early or delayed differentiation) and the 'decoupling points', (early or late shipping) under decoupled and non-decoupled systems. The study shows when one type of the strategies is more beneficial than the other. Our analysis indicates that the boundaries of a delivery window, the point of differentiation, the point of export, the safety factor, and the relative production cost differences across countries play an important role under postponement. We use the production of Desk Jet printers at Hewlett Packard to illustrate the applicability of this model.