Title: Decoupling the value chain

Authors: Jan Olhager, Erik Selldin, Joakim Wikner

Addresses: Department of Production Economics, Linkoping Institute of Technology, SE-581 83 Linkoping, Sweden. ' Department of Production Economics, Linkoping Institute of Technology, SE-581 83 Linkoping, Sweden. ' Department of Production Economics, Linkoping Institute of Technology, SE-581 83 Linkoping, Sweden

Abstract: All value chains are not designed the same way. A major determinant is the type of product that is to be supplied through the chain or network, calling for different types of value chains. An interesting model for this selection is the one developed by Fisher, arguing that products can be characterised as being either functional or innovative, and that supply chains are either physically efficient or market-responsive. Certain combinations of products and supply chains are assumed to provide matches whereas other combinations lead to mismatches. This paper combines this approach with the concept of a customer order decoupling point. We distinguish between a product supply decoupling point and a demand mediation decoupling point. A decoupling point divides the value chain into two distinct parts; one upstream with certain characteristics and one downstream with distinctly different characteristics. In this paper we specifically explore how the Fisher model can be used to characterise the role and features of upstream versus downstream value chain operations relative to the product supply decoupling point and the demand mediation decoupling point.

Keywords: customer order decoupling point; demand; information mediation; material; operations management; order penetration point; supply chain management; SCM; value chain management; VCM; product supply decoupling point; demand mediation decoupling point.

DOI: 10.1504/IJVCM.2006.009021

International Journal of Value Chain Management, 2006 Vol.1 No.1, pp.19 - 32

Published online: 13 Feb 2006 *

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