The (customer order) decoupling point (CODP) or order penetration point is one of the most well-known logistical concepts. It indicates the inventory location in the value stream up to which the customer order penetrates. The CODP is one of the key design decisions in structuring the value stream and its management. For instance, the CODP separates the part of the value stream that is order- driven (downstream of the CODP), from the part that is forecast-driven (upstream of the CODP). But is that necessarily true? Doesn’t kanban, in fact, represent a good example of managing the upstream part of the value stream based upon consumption rather than forecast? And aren’t a lot of companies still clustering their customer orders downstream of the CODP or working with lot sizes, resulting in products manufactured too early, too late or just too much? This blog post nuances the existing control dogma in relation to the CODP. (more…)
