StarTrak Information Technologies provides monitoring equipment for containers and trailers. William Walker, director of supply management, explains that this business has a long sales cycle, but customers want quick delivery once a contract is signed. To meet this challenge, StarTrak uses postponement strategies.
"We work closely with our engineering, manufacturing and distribution to make our products 'postponeable'," Walker says. This strategy has to start with product design, he notes. "You can't just take an existing product and say you want to use postponement in its production," he says. "The product has to be designed from the onset to be modular so that changes can be made during the manufacturing cycle."
Postponement allows StarTrak to delay final completion of manufacturing until a sales order is in hand, Walker says. StarTrak has various decision points at which it can determine how to finish the product. "During our long sales cycle, when we are working with potential customers, we are learning a certain amount about their fleet. We have been able to tie the sequence of this information flow into decision points in manufacturing and operations." StarTrak is effectively taking time out of the sales cycle and trading it for lead time in the manufacturing cycle, says Walker.
