Abstract

The purpose of this paper is to study the roles of the distributor in the supply chain and to explore its positive contributions. We find that the distributor should act as a push and pull boundary (also called decoupling point) of the supply chain. The definition of decoupling point is needed to be enhanced when the concept of the decoupling point is applied to an industry, like the electronics industry, due to the fact that several decoupling points along a supply chain are possible. The distributor, as a decoupling point, needs to resolve the overstock risk pooled from the upstream parties due to the economies of scale in the production process. On the other hand, the distributor needs to provide fast delivery service with small order quantities and to satisfy the high availability requirement from its downstream parties by providing postponement services to her partners in the supply chain.

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