UNIT – I

CODP and Marketing Environment Suitable for

SCM

COURSE NAME: SUPPLY CHAIN MANAGEMEMT

COURSE CODE : 18IBP13 PROGRAMME : I M. Com ( IB)
UNIT :I
HOUR :6
NAME OF THE FACULTY: Dr. T. SHENBHAGAVADIVU
Department of Commerce CA, BA&
M.Com(IB)
ATTENDANCE
SNAP TALK
 TOPIC FOR TODAY’S SESSION
• CODP and Marketing Environment
Suitable for SCM
• Customer order Decoupling Point (CODP)
• Industries and their classification

1
 Customer order Decoupling
Point (CODP)
• It is basically a point in the supply chain
which describes the degree of penetration
of the customer order into the supply
chain.
• It bifurcates the supply chain into two parts
1. The order – driven part
2. The forecast – driven part.
 Customer order Decoupling Point (CODP)
Raw materials Components Semi – finished Finished goods

ENG PROD PROD PROD

S Make – to – Stock
U C
P L
Assemble – to – order
P I
L E
I Make – to – order N
E T
R Engineer – to – order

Production based on forecast Stock Point Production based on customer order

 Customer order Decoupling Point (CODP)
As seen in the fig. the CODP basically
rearranges the supply chain into four
categories’
• Make to stock
• Assemble to order
• Make to order
• Engineer to order
 Industries and their
Classification
The basic industries existent as of today can
be classified as follows:
• Production Industries – process industries &
Discrete item manufacturing industries
• Service Industries
• Project Industries
The classification of these industries is
based on three major aspects – nature of
their work, volume and manufacturing
environment they perform.
 Classification of Industries
Process Industries

Production Industries
Discrete item
manufacturing
Industries

Basic
Project Industries
Industries

Service Industries
 Based on Nature of Work
Production Industries
These industries concerned with the
production of finished goods that have market
value.
It is further classified into:
• Process Industries – products produced with the
type of manufacturing where a product is produced
r transformed through mixing, chemical reactions
etc.
• Discrete item manufacturing industries –
manufacturing of distinct items – parts can be
disassembled and reassembled.
Project Industries
An Industry in which the tools, workmen etc
are brought to the site of the product presence.

The product generally is too large and bulky

to be moved around and so it becomes easier
and cheaper to get all the tools and
equipment's to the product site rather than
move the product which turns out too difficult
and costly.
Service Industries
All industries which are nit concerned with
the production of goods but provide certain
services can be classified as a service
industry.

Banking, Insurance, Communication etc are

the examples of service sector.
 Based on Volume
The industries are classified based on the
volume of the produced goods.
• Job Shop Production – limited no. of goods are
produced at a time and repetitive orders is low,
production volume is low.
• Batch / Intermittent Production – orders are taken in
batches, volume of production is high compared to
job shop production.
• Mass production – production is done on a large and
extensive scale.
• Cellular Production – the different parts of a company
are assigned different jobs and as a result only one
part will deal with one particular kind of job.
 Based on Manufacturing
Environment (CODP)
Manufacturing environment is essentially a framework
under which the management strategies are developed and
implemented. A manufacturing environment is influenced
by external factors such as corporate strategy, process /
batch manufacturing etc.
The various business unit strategy, product selection, types
are
• Assemble to order
• Engineer to order
• Make to order
• Make to stock
Assemble to order
It basically is a production environment where goods or
services are assembled / developed after the receipt of the
customers order. The characteristics are
• Wide variety in high volume with short lead times in response
to customer orders.
• Large variety – smaller number of components and
subassemblies.
• Forecast sales based on market research on sales history.
• Purchase/manufacture components and sub – assemblies
forecasted.
• Higher product volumes with lower inventory
CODP after completion of subassemblies, before final
assemble of selected models.
Engineer to Order
Products whose customer specifications require unique
engineering design, significant customization or new
purchased materials. Each customer order results in a unique
set of parts, bill of materials and routing.
The characteristics are
• Create solutions in response to customer requests.
• Specialize in developing customer products to meet specific customer
requirements.
• Long lead time – between customer order and delivery of product.
• Customer involved in design/engineering.

CODP before design / development of product.

Make to Order
It is a production environment where goods are made and
services are rendered after the receipt of a customer’s
order. The final product is generally a combination of
standard items and items custom designed to meet the
specifications of the customer. The characteristics are
• Manufacture standard products in response to specific customer
orders.
• Products are with long lead time.
• High price items have standard design with many variations.
• Low sales volume
CODP after engineering, before manufacturing.
Customer blueprint or engineering in conjunction with
customer.
Make to Stock
It is environment where products can be and are usually
finished before the receipt of a customer order. Customer
orders are placed – existing stock. Production orders –
replenish those stock. The characteristics are
• Standard products
• Immediate delivery from stock
• Maintain stocks in sizes, options, colours etc.
• Large finished goods inventories.
• All variations available in stock.
• No direct feedback about sales to customers.
CODP after completion of manufacturing.
 Keywords
• CODP ( Customer Order Decoupling Point)

• Industries – types

• Assemble to order

• Engineer to order

• Make to order

• Make to stock.

1
 MCQ
1. ___________ management involves the coordination of all supply
activities of an organisation from its suppliers to the delivery of products
to its customers.
(a) Supply Chain (b) Value Chain
(c ) Customer Service (d) Marketing

2. The sequence of a typical manufacturing supply chain is

(a) Storage–Supplier–manufacturing–storage–distributor–retailer–
customer
(b) Supplier–Storage-manufacturing–storage–distributor–retailer–customer
(c) Supplier–Storage-manufacturing– distributor–storage–retailer–customer
(d) Supplier–Storage-manufacturing–storage– retailer–distributor–customer
3. The purpose of supply chain management is
a) provide customer satisfaction
b) improve quality of a product
c) integrating supply and demand management
d) increase production

4. CODP means _________________

5. Industries means ___________.
 TOPIC FOR NEXT SESSION

Need for SCM in the market today