Using the Information Decoupling Point to Improve Supply Chain Performance

Traditionally, the decoupling point methodology has been associated with the material flow pipeline. However, to maximize improvement in supply chain dynamics, information flow is equally important. Many of the problems exhibited in the material flow pipeline are the result of the distortion of marketplace sales information as it is transferred upstream through the supply chain. This research expands on the traditional material decoupling point methodology and establishes the role of an information decoupling point within the supply chain. The authors demonstrate the business opportunities generated by first recognizing the existence of the supply chain information decoupling point and then learning how to utilize it to gain strategic advantage. In order to make sensible planning and delivery decisions, a business must be able to separate out contingency from real orders as they move upstream from the marketplace. It is the basis for supply chains moving towards continuous flow and away from point-to-point movements and ultimately, where appropriate, to holistic control.