Delayed differentiation is a supply chain technique that delays finishing a product until the last possible moment in the supply chain. This helps to align supply and demand and potentially allows products to be customized. The following are illustrative examples.
PaintPaint may be offered in hundreds of colors. Producing these at the factory tends to lead to overproduction of some colors and underproduction of others. As such, paints may be formulated from three or more base mixes. The final color may be produced at a distributorship or retailer.
AutomotiveAutomobile manufacturers that mass produce base models and add minor customizations when the car is actually ordered. In many cases, customizations such as audio systems may be installed at the dealership.
Fresh Packaged FoodsGrocery stores often run their own kitchens that produce fresh foods such as salads and precooked entrees in the store. Such local production reduces waste as the store creates things in small batches that typically sell.
FashionClothing companies may produce certain items in white and not perform the final coloring process until they know what colors are selling. Base items may be manufactured on a global basis and coloring steps may occur at regional locations.
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