Horizontal Environmental Assessment of Postponement Strategy – A Delphi-based Investigation

Sajed Abukhader, Gunilla Jönson

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This paper is based on the findings of a research work by Abukhader and Jönson (2004a), who discuss the possibilities and limitations of the ties of postponement strategy in food supply chains. They identified the cases/examples (i.e. company cases) of application of postponement across the various categories of foods: frozen, chilled/fresh and long shelf life. The food industry nowadays is in need for innovative solutions measures as it proceeds into a future full of speculations, pressures and tight margins (Lagneik et al., 2003).
Embracing postponement in those cases (with any of its several! forms) is referred to various reasons such as better management. cost-efficiency, private labelling, etc., but observably excluding the environmental reasons. Confusion. though, upon an argument on the correlation between cost-efficiency and reduction of environmental burden brings another point of interest in this respect. One may argue that all postponement cases identified anyway represent cost-efficiency situations, while the rest of non-postponement does not find postponement as a cost-efficient method to them. As such, being cost-efficient means mutually environmentally better (less environmental loads). Such an argument is in fact inaccurate; the following is an explanation.
This argument, basically, carries two points. The first has to do with the cost being the reason behind taking a postponement decision, and this is in fact not an accurate analysis. This is because:
• It is not always that cost efficiency is the reason; there can be other forces or needs behind adopting postponement, for instance: a situation of limited production capacity, or willing to outsource packaging operation due to limited capital’ investment costs. etc.
• In some instances, the cost issue remains one of the things to minimise after choosing postponement for a reason such as introducing a new product (different in form or contents), or making private labels, etc.
• In some other situations such as choosing ‘production to order’ (one form of postponement), the reason might be demand invisibility; it cannot be taken simply as a cost efficiency problem (lost costs of unsold items)but as a production planning problem. The problem of lost costs of unsold items is direct in a Situation where it is a traditional economy of scale production form and the company is realising after a while that there still is an un-recovered burden of unsold items at the ends of the supply chain.
Rewarding to recall here is that for using postponement there are forces, enablers and factors that are related to product, process, production. and market characteristics as summarised in Abukhader and Jönson (2004a).
The second point has to do with the relationship of costs with environmental loads. Assuming a linear correlation between them is not accurate or even is not correct. This is because:
• Improving cost efficiency does not necessarily mean or lead to reducing environmental loads, but might sometimes not affect the environmental loads or might in some instances even increase the loads. For example, we may change facility locations to lower the costs (ex. with cheaper labour costs) but this does not mean a reduction in environmental loads. In general, abatement works for reducing emissions often burden the budget. reducing environmental loads, but may on the other hand incur loads due to an added freezing process or keeping aseptic conditions), and
• Even if cost efficiency happens to lead to reduction of total environmental loads, this can be only at a “process/operations” level and not the whole supply chain (considering all the related processes/operations in delivering the product of concern). If we say that the producer finds delaying packing works (in time or location) more cost efficient, this might be true at the level of analysis of production process only and might be compensated with added loads somewhere else in the supply chain at the warehousing point, or transportation process or at the retailing point etc.
The purpose of this paper is to test the possibility if arriving at an environmental perspective of postponement, demarcated to the food industry, through looking at those identified cases/examples, The aim is to arrive at an “environmental judgment” in total on the cases if they indicate altogether a tendency towards “environmental gain” or “environmental loss”, in other words, towards sustainable development or the inverse. Building such a perspective can provide an integrative support to the future decision making of the food industry on expanding or declining the use of postponement. Yet, this paper does not provide a clear picture of ‘postponement & environment’ issue but in fact represents a pilot work calling for further investigations and development.
Original languageEnglish
Pages (from-to)382-392
JournalInternational Journal of Management Science and Engineering Management,
Issue number5
Publication statusPublished - 2011

Bibliographical note

International Journal of Management Science and Engineering Management

Subject classification (UKÄ)

  • Other Mechanical Engineering

Free keywords

  • postponement
  • Horizontal Environmental Assessment
  • Life Cycle Assessment
  • strategy
  • Delphi
  • packaging logistics


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