Form postponement and operations strategy: a contingency theory

Form postponement is an operations design principle requiring that changes in product form occur at the latest possible point in time along a manufacturing and distribution process. The rich literature on form postponement, dominated by inventory models and logistic considerations, almost ignores its market implications and often provides seemingly conflicting findings concerning its operational implications. Unsurprisingly, a theory capable of predicting and explaining how form postponement can support business strategy by creating cost and market advantages is still missing. In this paper, we argue that, to reconnect form postponement to the operations strategy discourse, four types of form postponement should be distinguished based on their effect on uncertainty affecting either the supplier or the customer when product variety is offered. We build this thesis by developing a theoretical framework that predicts and explains under which environmental and internal contingencies each type of form postponement creates stronger operations-based competitive advantage. Doing so, we relate each type of form postponement to a specific and established operations strategy designed to efficiently and effectively deliver variety and customization to customers. Directions for future research and implications for practice are finally discussed.