Strategies for demand-driven supply chains : A decoupling thinking perspective

Abstract: In environments where customer requirements are constantly changing, such as for demand-driven manufacturing companies, the competition involves the ability to act and adapt to customer needs, sometimes even based on commitment from actual customer orders. In this context it is perhaps even more challenging to balance supply and demand. Several strategies proposed in the literature aid in this balancing act and are in this dissertation labelled demand-driven supply chain operations management strategies(DDSCOMSs). The research purpose is then to explore how demand-driven manufacturing companies can combine DDSCOMSs for effectiveness, focusing on five DDSCOMSs: segmentation, leagility, customization, transparency and postponement.Based on an interactive approach, the research combines analytical conceptual research and empirical case studies. The data are mainly collected from literature reviews, interviews, workshops, observations and archival documents.The research operationalizes the concept of demand driven using decoupling thinking, before identifying and describing relations between decoupling thinking and the five DDSCOMSs. The results are summarized in a process for aligning supply chains with the characteristics of the products and the market demand. This process can be used by supply chain operations managers to understand the relations between the DDSCOMSs and howthey can be combined.Furthermore, the relations between the financial performance measure – return on investment – and the five DDSCOMSs are established through decoupling thinking and summarized in a framework for how the DDSCOMSs can be combined for effectiveness. This framework, as well as the empirical data on which it is developed, equips supply chain operations managers with the knowledge and the ability to analyze the financial implications of a potential change in the supply chain design.The research contributes to literature and practice by both summarizing existing and establishing new relations between some commonly used DDSCOMSs, as well as their relations to financial performance. The approach to developing the DDSCOMS framework for effectiveness also allows future research to expand on the framework by including additional DDSCOMSs, constructs of decoupling thinking and/or financial performance measures. Finally, in using constructs of decoupling thinking to establish the relations between the five DDSCOMSs and their implications for financial performance, the research also contributes towards establishing decoupling thinking as atheory.