Abstract Delayed product differentiation (DPD) is a design concept for improving customer satisfaction and manufacturing performance. In this paper, a methodology for implementing the delayed product differentiation strategy in manufacturing is presented. Three design rules are suggested. The impact of delayed product differentiation strategy on the performance of a manufacturing system is quantified and incorporated in the product design. The problem of selecting designs to minimize the total differentiation and manufacturing cost is formulated and solved. The methodology presented in the paper is illustrated with examples.