Commonly Used Terms

Postponement is a purposeful delay created by a shipper in committing inventory to a shipment. It is also known as delayed differentiation, is an "adaptive supply chain strategy that enables companies to dramatically reduce inventory while improving customer service" The concept is to delay the point of the commitment of work-in-process inventory into a final product and, thereby, gain control of efficient asset utilization in an uncertain environment. Mostly, shippers utilize this delay to consolidate freight into larger quantity/bulk shipments so that they can benefit from economies of scale in the form of lower per-unit transport costs.