Research Article
Delayed Differentiation Production in Global Supply Chains Using Dynamic Simulation
1 Hansung University, 2 ATKearney, 3 Seoul National University
Published: January 2007 · Vol. 36, No. 2 · pp. 573-594
Full Text
Abstract
This study designs a quantitative model that analyzes existing product differentiation postponement production policies from the perspective of extended supply chain management under global competition, and seeks to derive the benefits of product differentiation postponement timing through system dynamics simulation analysis of this mathematical model. Specifically, this study incorporates key strategic decision variables—such as shipping timing—that have not been considered in prior research on product differentiation postponement production from the perspective of distribution channel management in manufacturing, and introduces new additional variables that must be considered in global supply chain management, such as tariffs and production cost indices, to present a quantitative model capable of analyzing the value of product differentiation postponement production. Furthermore, the study seeks to derive practical managerial implications through system dynamics simulation analysis. As a result of the simulation analysis, by additionally incorporating decision variables that determine shipping timing between individual countries into the existing research model, improved results beyond those of prior studies were obtained. Moreover, by introducing additional variables that determine the differing circumstances between countries, efficient operational strategies for the entire supply chain system in global supply chain management were derived.
