Manufacturing Postponement: reducing upstream vulnerability by means of an improved flexibility

As supply chain vulnerabilities and the dependence of companies to their partners (i.e., suppliers) intensify, companies are adopting manufacturing postponement in order to reduce potential negative effects of supply risks. Indeed, manufacturing postponement allows firms to properly manage point of differentiations along their production lines, improving companies’ reactions capabilities. This study built a framework that relates the adoptions of postponement underlying tactics (i.e., product modularity and process re-sequencing) to the development of flexibility and to the achievement of competitive advantage (i.e., reduced exposition to supply risks). Based on data collected from54 Italian manufacturing companies we show that the adoption of manufacturing postponement directly influence firms’ resiliency. Furthermore, we show that this relationship can be partially explained by an indirect path through flexibility.