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CODP

Customer Order Decoupling Point

Customer Order Decoupling Point is a Term describing the process or node in the supply chain network where the activities are no longer driven by individual orders. Managing Customer Order Decoupling Points is a Best Practice.

Understanding the Customer Order Decoupling Point of a supply chain is important for Supply Chain Management processes. The behavior of processes upstream and downstram of the Customer Order Decoupling Point is quite different:

  • Upstream processes are driven by forecast based planning information (blue in the diagram), Materials are pushed downstream. Optimization is realized by balancing inventory and capacity.
  • Downstream processes are driven by actual customer orders (green in the diagram). Materials are pulled by the order. Optimization is realized by balancing capacity and lead-times.

The OpenReference Supply Chain Operations Domain recognizes these differences in behavior at level-2: Make-to-Stock (MTS), Make-to-Order (MTO, CTO, ATO, PTO), and Engineer-to-Order (ETO). Customer Order Decoupling Points (white rounded box in the diagram) typically reside in the first MTS process (when looking upstream):

Strategy

Supplier Receive, Store Pre-build/ Produce Assemble/ Finish Package, Store Pick, Load, Ship Invoice Customer

VMI (MTS)

Vendor Managed Inventory

D*

S1

M1

M1

M1

D1

D1

S*

MTS

Make-to-Stock

D*

S1

M1

M1

M1

D1

D1

S*

PTO (MTO)

Package-to-Order

D*

S1

M1

M1

M2

D2

D2

S*

ATO (MTO)

Assemble-to-Order

D*

S1

M1

M2

M2

D2

D2

S*

CTO (MTO)

Configure-To-Order

D*

S1

M2

M2

M2

D2

D2

S*

D*

S2

  Supplier Source Make Deliver Customer

For Engineer-to-Order replace Customer Order with Customer Intent.

Use Cases

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Process(es)

IDNameLevelx
A108Define Supply Chain Network3A108
A202Define Supply Chain Network3A202
A203Define Network Process Flow3A203
A210Define To-Be Supply Chain Network3A210
Customer Order Decoupling Point Best Practice, Customer Order, Decoupling Point, Order Cycle, Order-to-Cash, Supply Chain, Network The process or node in the supply chain network where the activities are no longer driven by individual orders