Abstract:

The 21st century also known as a customer friendly environment in which customers has a plethora of options to choose purchase any product is characterised by fierce competition. This competition demands industries not only to provide more customised products with competitive prices but also deliver them on time. Unfortunately, manufacturing customised products requests for additional cost and investment from manufacturers. Therefore, industries to compromise on separate investments for each customised product, the customisation getting converted into a building with multiple finished goods inventory for the base product through among other things, the postponement strategy. What is a postponement, and how it can be applied to the automobile industry? The postponement strategy is based on the following two fundamental principles of demand forecasting. The accuracy of the forecast demands decreases with an increase in a long time. Second, the demand projections for a product group are more accurate than estimates for individual products. The postponement strategy leverages the characteristics of demand forecasting. It dictates that the manufacturing organisations should postpone the production or delivery of the final product as long as possible. The implication for retailers is that this postponement delays the delivery of the final product to its destination, while for assemble-to-order manufacturers this means postponing the final assembly of the product. This paper attempts to develop the concept of   postponement with the focus on the South African automobile industry.    

Keywords: postponement, South Africa, Automobile industry, manufacturing