Coping with the postponement boundary problem: an empirical investigation in global food supply chains

• DOI: https://doi.org/10.1108/IJLM-10-2021-0508
• Published date: 02 March 2022
• Date: 02 March 2022
• Pages: 687-711
• Subject Matter: Management science & operations,Logistics
• Author: Lorenzo Bruno Prataviera,Emilio Moretti,Elena Tappia

Coping with the postponement

boundary problem: an empirical

investigation in global food

supply chains

Lorenzo Bruno Prataviera

Centre for Logistics, Procurement and Supply Chain Management,

Cranfield School of Management, Cranfield University, Cranfield, UK, and

Emilio Moretti and Elena Tappia

Department of Management, Economics and Industrial Engineering,

Politecnico di Milano, Milano, Italy

Abstract

Purpose –The postponement boundary problem entails that duties and cross-border trade complexity can

lead companies to geographically postpone operations to downstream global facilities.The present study aims

at investigating the problem to provide insights into the drivers behind the choice of different postponement

strategies for global food supply chains.

Design/methodology/approach –A single case study was conducted considering an Italian company

exporting olive oil toward the United States. Two global postponement strategies, previously formalized in the

literature, were tailored for food supplychains. A multi-methodological approach was adopted, combining data

obtained through exploratory case research with empirically grounded analytical modeling. A sensitivity

analysis was also performed, to investigate outcomes related to the considered problem when changing key

parameters.

Findings –Bulky and heavy packing materials account for a big percentage of finished products’volume and

weight, and this can deeply affect strategies’cost-effectiveness. Postponing packaging operations could allow

for taking advantage of lower tariffs levied on bulk goods, contributing to significantly lower duties to be paid.

However, important trade-offs could arise related to the required investments, and the fiscal regulatory

frameworks must be carefully examined.

Originality/value –This study offers an empirical investigation of the postponement boundary problem,

which is largely unexplored in the current literature. It also tackles an understudied empirical context as global

food supply chains. It summarizes the drivers behind and explores the costs related to the implementation of

different strategies, offering an original quantitative approach that could support practitioners’decision-

making. Lastly, it formalizes five propositions that could pave the way for further research inquiries.

Keywords Postponement boundary problem, Food supply chains, Duties, Case study, Analytical model

Paper type Research paper

Introduction

In recent decades, companies have increasingly looked beyond domesticmarkets and supply

sources,stressing theimportance and complexityof global supplychains (Meixelland Gargeya,

2005). Global operationsentail a significant increasein uncertainty (Cohen and Lee, 2020), and

postponement progressively emerged as an effective strategy to increase responsiveness to

customerdemands while containingsupply chain costs(Boone et al., 2007;Jafariet al., 2022). By

deferring in timea product’s final configuration or time of movementdown the channel, firms

delay commitment to a specific customer or market, thus reducing uncertainty and

consequentlycosts (Zinn and Bowersox, 1988;Pagh andCooper, 1998;Yang et al., 2004).

A global perspective on postponement is not new to theresearch agenda (van Hoek, 2001),

but new opportunities for global postponement strategies are emerging nowadays (Zinn,

2019). The location where operations take place, as well as the place and form in which stock

Postponement

for global food

supply chains

687

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Received 29 October 2021

Revised 23 January 2022

Accepted 15 February 2022

The International Journal of

Logistics Management

Vol. 33 No. 2, 2022

pp. 687-711

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-10-2021-0508

is held, can have a major impact on the companies’overall performance (van Hoek, 1996).

Increasing protectionism and cross-border trade complexity can also motivate companies’

decision of undertaking some operations downstream in distribution facilities (Cooper, 1993;

Lee, 2010). Consequently, a spatial perspective must be taken into account when designing

postponement strategies for global downstream supply chains, along with the conventional

temporal one (Prataviera et al., 2020). Specifically, determining what downstream activities

could be performed in the global distribution network, rather than in the centralized factories,

has been termed the “postponement boundary problem”(Lee, 2010).

Although a growing body of literature is available about postponement and its global

implications, the postponement boundary problem represents an original research issue

within the broad research stream, and recent contributions acknowledged its current under-

examination in the academic literature (Prataviera et al., 2020). Promising research directions

exist, related to the identification of the key enablers and inhibitors of postponement (Boone

et al., 2007;Kisperska-Moron and Sw



ıerczek, 2011), and to the study of different strategies in

relation to cost-effectiveness and fields of application including different regions and

industries (Zinn, 2019). In particular, global postponement studies mainly focused on high

technology products with a modular structure (Lee and Billington, 1994;Choi et al., 2012).

However, some scholars proposed postponement as a valuable strategy also in the food

industry (van Hoek, 1999;Ferreira et al., 2021). Although products’non-modularity offers

additional challenges, in the food industry postponement may lead to significant cost savings

(Abukhader and Jonson, 2007;van Kampen and van Donk, 2014) due to potential inventory

carrying and transportation costs reduction (van Hoek, 1997;Bandaly and Hassan, 2020).

Also, trade agreements may result in lower customs duties if specific requirements are met

and some activities take place in the country where the goods are sold (Henkow and Norrman,

2011;Cheptea and Huchet, 2019). With increasing trade barriers and trade conflicts

worldwide (Handfield et al., 2020;Roscoe et al., 2020), the food industry represents thus a

relevant industry in which to analyze the geographical reconfigurations related to the

postponement boundary problem.

From a methodological viewpoint, case study research has been recommended to

investigate postponement (Zinn, 2019) as it can provide profound insights into complex,

multifaceted phenomena, especially when the boundaries between a phenomenon and its

context are not clear (Yin, 2009). However, there is a lack of quantitative studies about the

cost-effectiveness of different strategies, and this calls for building ad hoc models to compare

available alternatives (Choi et al., 2016). Previous scholars highlighted the need for a

methodological upgrading of postponement-related research (van Hoek, 2001;Zinn, 2019) and

suggested that multi-method approaches could create complementarity that adds richness to

problem understanding (Sanders and Wagner, 2011). Based on these premises, the present

study aims at elaborating previous contributions by addressing the following research

questions (RQs):

RQ1. What strategies could be adopted to cope with the postponement boundary

problem in global food supply chains?

RQ2. What drivers could affect companies’decisions on postponement strategies?

To address these RQs, a single case study was conducted concerning an Italian company

exporting olive oil to the USA, and a multi-methodological approach was adopted (Choi et al.,

2016). Data obtained through exploratory case study research led to formalizing two

postponement strategies tailored for global food supply chains, and empirically grounded

analytical modeling followed to quantitatively compare such strategies.

From an academic viewpoint, this study aims at extending the current postponement

theory by exploring an understudied empirical context (i.e. food supply chains) for the

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