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Managing Customer Order Decoupling Points in Supply Chains

In: The Palgrave Handbook of Supply Chain Management

Author

Listed:
  • Jan Olhager

    (Lund University)

  • Dirk Pieter Donk

    (University of Groningen)

Abstract

The concept of a customer order decoupling point (CODP) has been discussed since 1984. The CODP refers to the point in the supply chain at which a product is linked to a specific customer. Consequently, make to stock (MTS), assemble to order (ATO), make to order (MTO), purchase and make to order (PMTO), and engineer to order (ETO) all refer to different positions of the CODP. The CODP separates the operations downstream of the CODP that are based on actual customer orders from those upstream that are forecast driven. We discuss the strategic importance of the CODP and the characteristics of upstream versus downstream operations. The CODP concept is applicable to all industries, and we illustrate it with examples from the food processing and service industries. We discuss how the CODP relates to bottlenecks, the product life cycle, leagility, mass customization, modular product designs, and postponement. With respect to the differentiating features of upstream versus downstream, the CODP is an important contingency variable for many operations and supply chain management areas, including performance measurement. We conclude this chapter with a discussion on theoretical perspectives.

Suggested Citation

  • Jan Olhager & Dirk Pieter Donk, 2024. "Managing Customer Order Decoupling Points in Supply Chains," Springer Books, in: Joseph Sarkis (ed.), The Palgrave Handbook of Supply Chain Management, pages 1115-1137, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-19884-7_103
    DOI: 10.1007/978-3-031-19884-7_103
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