Postponement practices in the Brazilian Southeast wine sector

• Date: 22 June 2020
• DOI: https://doi.org/10.1108/IJLM-10-2019-0292
• Published date: 22 June 2020
• Pages: 6-23
• Subject Matter: Management science & operations,Logistics
• Author: Karine Araujo Ferreira,Mylena Letícia Toledo,Lásara Fabrícia Rodrigues

Postponement practices in the

Brazilian Southeast wine sector

Karine Araujo Ferreira and Mylena Let



ıcia Toledo

Department of Production Engineering, Federal University of Ouro Preto,

Ouro Preto, Brazil, and

L

asara Fabr



ıcia Rodrigues

Department of Production Engineering, Federal University of Minas Gerais,

Belo Horizonte, Brazil

Abstract

Purpose –The purpose of thispaper is to investigate the application of the postponement strategy by wineries

in the state of Minas Gerais (Southeastern Brazil), in order to identify the types of postponement adopted by

these companies, the implementation process and the results obtained after their adoption.

Design/methodology/approach –Twelve exploratory case studies were conducted in wine-producing

companies, as well as on-site visits and semi-structured interviews with the managers of the companies

surveyed.

Findings –The adoption of form postponement was verified in the companies studied mainly for table wine

production, occurring most commonly during the bottling and labeling stages.

Research limitations/implications –This paper analyzed the application of the postponement strategy in

Southeast Brazil. Future research should analyze the application of this strategy in other regions of the country

and abroad.

Practical implications –The information acquired in this research can contribute to a more adequate

practical application of the postponement strategy in a little-known industry sector.

Originality/value –In addition to discussing and verifying the application of the postponement strategy in

the wine industry, this research presents information to assist in its implementation, use and consolidation.

Keywords Postponement, Customization, Wine sector, Wine production, Operations management

Paper type Case study

1. Introduction

Although approximately 90% of Brazilian wine is produced in the South of the country, the

first grape-planting initiatives started in the Southeast region (Dutra et al., 2011;Castrill

on

et al., 2017). According to IBRAVIN - Instituto Brasileiro do Vinho (2018), the first Vitis

vinifera vines (grapes used to produce fine wine) were brought to Brazil by Martim Afonso de

Souza in 1,532 and planted in the Southeast. However, the unfavorable climate and soil

conditions meant that this initial attempt did not meet with success.

In recent years, the production of wine, especially fine wines, has grown in quantity and

quality in the state of Minas Gerais –located in the Southeast region of Brazil where this

research is focused. This growth is mainly due to the application of innovative handling

techniques, such as planting density and pruning techniques, of which the double pruning

method stands out. It was introduced in Brazil by the researcher Murillo de Albuquerque

Regina (Dias et al., 2017;Favero, 2007).

Postponement

practices in the

wine sector

5

The authors would like to thank the Wineries for its collaboration with this research. This paper is

partially supported by Minas Gerais State Agency for Research and Development - FAPEMIG, under

grant APQ-03060-16, Federal University of Ouro Preto, CNPq and CAPES in Brazil. The authors would

also like to thank the editor and the anonymous reviewers for their constructive comments and guidance

in the review process.

The current issue and full text archive of this journal is available on Emerald Insight at:

https://www.emerald.com/insight/0957-4093.htm

Received 28 October 2019

Revised 1 March 2020

24 April 2020

Accepted 15 May 2020

The International Journal of

Logistics Management

Vol. 32 No. 1, 2021

pp. 5-22

© Emerald Publishing Limited

0957-4093

DOI 10.1108/IJLM-10-2019-0292

Nevertheless, although sales channels recognize the quality of the national product,

especially the improved quality of wines –particularly sparkling wine, which has been

awarded several national and international awards –the consumer’s perception of imported

wines as superior, in addition to their similar or lower prices compared with national

production, continues to be the key reason for the consumer preference for imported wines as

opposed to the national product (IBRAVIN –Instituto Brasileiro do Vinho, 2008).

In this sense, there is a need to seek new production and innovation alternatives in order to

make the sector more competitive in relation to foreign brands. For Van Hoek et al. (1999), one

way to address this challenge is to design and develop standard or generic products that can

be customized quickly and at low cost once consumer demand becomes known. This strategy

also involves implementation of specific inventory strategies that allow products to remain in

a single location in the distribution channel (inventory centralization) until the order is placed.

This strategy is known as postponement and consists in delaying any movement and/or final

configuration of products as long as possible (Alderson, 1950;Van Hoek, 2001).

Studies concerning the postponement concept, which was first introduced in the literature

in 1950 (Alderson, 1950), can be found in several sectors, such as electronics and appliances

(Feitzinger and Lee, 1997;Graman, 2010;Tang, 2011), apparel (Fu et al., 2012;Zhang et al.,

2013) and automotive (Choi et al., 2012;Wadhwa et al., 2008). Nevertheless, few studies

present results for its application in the food and beverage sector (Ferreira and Alc^

antara,

2015, 2016).

Research on the adoption of the postponement strategy in Brazil is particularly scarce in

the wine sector. Most of the work on this subject is found in the United States and Europe,

such as those of Bouzdine-Chameeva et al. (2012),Bouzdine-Chameeva and Cholette (2011),

Cholette (2009,2010), and Van Hoek (1997). Thus, it is necessary to analyze and indicate

possible applications of this strategy in companies producing grape products in Brazil.

This study investigates the application of the postponement strategy in wineries in the

state of Minas Gerais. The paper is comprised of five sections including the introduction.

Section 2 presents a summary of the literature on postponement. The research method is

described in Section 3, followed by the results obtained in research on the application of

postponement in the wine sector and the case studies, summarized in Section 4. Finally, the

conclusions are presented in Section 5.

2. Postponement strategy

The concept of postponement was first introduced in the marketing literature by Alderson

(1950) as a way to delay product differentiation or location change as long as possible in the

manufacturing and distribution chain. Thus, the product is not shipped until the point of

demand (or point of consumption) is known, at the same time, as its final configuration

(customization) is determined only when consumer preferences are fully understood

(Alderson, 1950;Van Hoek, 2001). According to Alderson (1950), postponing product

movement is called “time postponement”, while the delay in product differentiation is referred

to as “form postponement.”

After 1965, few papers addressed the subject until the late 1980s, when Zinn and

Bowersox (1988) proposed a conceptual categorization of the postponement strategy into five

different types –four related to changes in product form (labeling, packaging, assembly and

manufacturing) and one related to time (centralization of inventories).

Other postponement classifications are proposed in the literature, such as manufacturing

postponement and logistics postponement (Bowersox and Closs, 1996;Pagh and Cooper,

1998); production postponement, upstream and downstream postponement and distribution

postponement (Waller et al., 2000); postponement related to changing the sequence of

activities and time-based postponement (Garcia-Dastugue and Lambert, 2007).

IJLM

32,1

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