Dictionary

Customer-order based management (COBM)
Customer-order based management (COBM) is a management approach that emphasizes the individual customer’s demand as a key input to flow-based decision making in the supply network.

Fundamental concepts

The decoupling framework in the first paper is based on the following set of assumtions:

  1. Logical entities are the platform for decisions on flow based management.
  2. Flow provides the point of reference for identifying lead-time based decision categories.
  3. Decision categories are defined based on decision criteria.
  4. Decision criteria are used to define decision domains within a decision category.
  5. Decision domains for the same decision criteria are separated by decoupling points.
  6. Decoupling points are positioned at the interface between two decision domains.
  7. Decoupling zones correspond to mixed properties in a decoupling point scenario.
  8. Process-based or resource-based perspective can be applied on decoupling zones.
  9. Lead-time relations position decoupling points/zones and decision domains.
  10. Compounded decision domains reflect the complexity of an actual decision problem.

The different concepts used in the assumtions are defined as:

A logical entity is a network of one or more physical entities that from a management perspective can be considered as one integrated network, offering the same level of controllability in all its parts.

A flow represents the value-adding for customers through a set of transformation processes.

A decision category groups decisions into major categories that are fundamental to decision making for a particular purpose.

A decision criterion is a standard on which a decision may be based.

A decision domain is characterized by consistent preconditions for decision making related
to a specific decision criterion.

A decoupling point separates decisions that are made under different consistent properties related to a specific decision criterion.

A decoupling zone covers decisions that are made under mixed properties related to one or more decision criteria.

A process-based decoupling zone is based on the gradual transition between two properties of one decision criterion related to one flow.

A resource-based decoupling zone is based on the intersection between different properties of one decision criteria across one or more flows.

A lead-time relation is a ratio of two strategic lead-times.

A compounded decision domain covers the intersection of two decision domains related to two separate decision criteria.

Some applications of the decoupling framework

The decoupling approach can be applied in different decision categories resulting in the following concepts (also from the first paper):

The customer order decoupling point (CODP) separates decisions about initiating flow based on speculation on future customer orders from commitment against actual customer orders.

The customer order decoupling zone (CODZ) covers decisions about initiating flow based on a compromise of speculation and commitment on customer orders.

The customer adaptation decoupling point (CADP) separates decisions about differentiating flow based on standardization for a market of different customers from adaptation against actual customer orders.

The customer adaptation decoupling zone (CADZ) covers decisions about differentiating flow based on a compromise of standardization and adaptation for customer orders.

The purchase order decoupling point (PODP) separates decisions about delimiting flow based on what is external to the logical entity from what is internal and hence controllable.

The purchase order decoupling zone (PODZ) covers decisions about delimiting flow based on a compromise on what is external and what is internal to the logical entity.

The demand information decoupling point (DIDP) constrains the transparency upstream of demand information.

The supply information decoupling point (SIDP) constrains the transparency downstream of supply information

Alternative definitions