Identification of the CODP location constrained by controllability and service requirements
June 17, 2013
The position of the CODP location is determined by the customer lead time and the cumulative lead time of items in the BOM of end-items. In CTO and ATO environments the customer lead time exceeds the final assembly lead time and possibly the sum of final assembly lead time and module assembly lead time. Yet the position of the CODP is not only determined by lead times. It should also be verified whether the inventory at the CODP level can be effectively controlled. It can be shown by discrete event simulation that when the coefficient of variation of demand exceeds 5/3 then the inventory cannot be controlled, i.e. one cannot set a target operational customer service that can be realized with sufficiently high probability. In this MSc thesis Merel van Wanrooij elaborated a CODP positioning concept based on the above two foundations and applied it to the Hilti supply chain.