Abstract:
This paper discusses about a company that adopts make-to-order strategy because
the company does not have enough fund to provide raw material. The raw material is ordered
when the order is received. It occurs a very long customer lead time due to the production
process must wait for the arrival of material. Consequently, the company cannot meet the
customer order at the due date, and the company should give a discount of 25 - 30% of the total
purchases. This research aims at reducing customer lead time by determining a decoupling
point. The result shows that the decoupling point is placed between the procurement of raw
materials and the manufacturing process. The decoupling point denotes a boundary between
the make-to-stock strategy in the previous process, and the make-to-order strategy for the
process afterwards. The lead time customer is then considered start from the decoupling point
to the due date.
