Comparative Studies On Operation Cost Model Based On Different Packaging Strategies

Postponement is the strategy that enterprises will postpone their manufacture,assembly, packaging, trademarks or some other value-added activities until they havereceived orders from their clients. This strategy can meet the personalized needs of clients,reduce inventories, respond to customers quickly and gain competitive advantage forenterprises. Postponement can occur in manufacturing, assembling, packaging and otherlinks, which are respectively defined as manufacturing postponement, assemblingpostponement, packaging postponement and so on.In the traditional model where prediction serves as the impetus and production as thecenter, packaging is the end of production followed by the semi-finished productsbecoming finished goods stored in the warehouse, waiting fo r demands.However, due todemand uncertainty and prediction deviation, in the production process, such phenomenoncan occur to the same products in different packagings:one in shortage while the other insurplus. Packaging postponement is the very strategy that has arisen in response to thisproblem.Packaging postponement means enterprises will not package their products thevalue-added activities until the customers’orders have reached them,the advantage of whichis that not only have the problems arising from more personalized and diversified productpackaging demands been solved, but also the operation costs which may go up as a result ofthe factors such as demand uncertainty can be considerably reduced.Both chinese and foreign scholars have been doing a great many researches on thedefinition and application of postponement, most of which,however,are focused on thepostponement application of mass customization. Researches on the postponement strategyapplied in packaging link have rarely been done.If there is any, the analysis on the operationcost in packaging link just stays on the surface.This paper, combined with the practice data of enterprises, analyzes the operation costsin the packaging link. Firstly, based on the definitions of other scholars on packing strategy,this paper defines the postponement packaging strategy, partial postponement strategy andfull postponement strategy and analyzes the operation procedures and costs constitution ofthe three different packaging strategies. Secondly, according to the relationship between theconstitution of operation costs and the quantities of influence factors,this paper establishes operation cost models for the three different packaging strategies, and lists thecorresponding constraints. Then, after the analysis of the sensitivity of postponement cost,postponement inventory holding costs, customer service levels and demand fluctuation,thispaper compares the changes of operating costs under different packaging strategies so as tohelp manufacturers to choose the appropriate packaging strategy. Finally, taking BeijingRicoh Printing Co Ltd as an example,this paper analyzes and verifies the practicalapplication of the packaging strategy,hoping to provide other enterprises with reference foruse and research.