On postponement strategies for product families with multiple points of differentiation

Abstract

Several researchers have studied the benefits of product and process design that calls for delaying the differentiation of products. Previous research has focused on products having only one point of differentiation. However, in reality most product families have several points of differentiation. In this paper, we develop two models to study products with more than one point of differentiation. In each model, we examine the benefits of delayed differentiation at each of these points, and derive the necessary conditions when one type of delayed differentiation is more beneficial than the other. Our analysis indicates that demand variabilities, correlations and the relative magnitudes of the lead times play an important role in determining which point of differentiation should be delayed.