Evaluation of postponement strategy in the production of table wine in Brazil : a discrete event simulation approach.

Abstract

Purpose – The purpose of this paper is to develop an approach to evaluate the partial postponement strategy and compare it with postponement and make-to-stock (MTS) strategies in the production of table wine in wineries in the state of Minas Gerais (south-eastern Brazil). Design/methodology/approach – An approach based on discrete event simulation was developed to support decision-making in the wine sector. Simulation models were used to analyse partial postponement, postponement and MTS strategies in wine production. These models were inspired by a typical table wine producer selected from an exploratory study conducted in 12 wineries of Minas Gerais state in Brazil. Findings – Hybrid strategies, such as partial postponement, favour the advantages of postponement and MTS depending on the portion of semi-finished and finished goods adopted. Wine production characteristics favour postponement and partial postponement with high semi-finished product levels (customer order-driven product) because this allows companies to reduce their inventory of bottles, despite possible increases in lost sales and costs. MTS and partial postponement with high finished product levels (forecast-driven product) present higher costs with bottled wine storage; however, these strategies reduce lost sales and improve agility and reliability in deliveries. Research limitations/implications – Future research should analyse the production of table wines in other regions of the country and the production of fine wines. Practical implications – The findings suggest promising perspectives for real-life applications in wineries in Brazil and other countries. Originality/value – Simulation techniques allow the analysis of production strategies in little-known industries, such as table wine production in Brazil. The approach developed is flexible enough to support decisions and to be adapted to companies’ and markets’ characteristics and to test specific strategies.