Evaluating postponement of differentiating tasks in the batch process industry, by Lotte van den Eijnde (with DSM NeoResins+)
June 7, 2013
In academic literature it is often suggested that the concept of postponement is beneficial in the batch process industry, but the implications of this concept in this specific industry are unknown. By observing the alkyd supply chain at DSM NeoResins+ (DNR+) as an example, insight are given about the effectiveness of postponement in the batch process industry. Results indicate that the service level increases, while the inventory related costs reduce. For DNR+ however, these advantages do no outweigh the major disadvantage that the smaller batches and the high fixed costs per batch, results in an increase in processing costs. An improvement in the first redesign, which decreases the fixed cost per batch, shows that postponement becomes more effective concerning the total relevant cots. This example illustrates the important condition that fixed costs per batch should be relatively low in order for postponement to be effective in batch process industries, which are characterized by high fixed costs.