Need for segmentation of your supply chain

Supply chain segmentation is the end to end alignment of your customer channels in order to optimize your service and net profitability.

It requires that you need to review your products characteristics, review your service models in order to optimize your supply chain. This can turn out to be quite complex, depending on your differentiation of products and customers demand. Still segmentation will reduce the complexity of your supply chain.

In order to achieve segmentation companies need to go through a detailed and intensive analysis of their products and customers. It requires how and why customers place their order.  Analysis will show you which combinations are possible within your supply chain and more, at which specific point this should be realized.

Despite the need to offer different value propositions to different customer segments, companies can drive synergies in the supply chain by leveraging volume across the various segments to reduce costs. This is done through leverage economies of scale.
Another opportunity in leveraging volume across various segments is to emphasize the use of standard components in product design. While the corporate business might be best served by a Configure-to-Order strategy and the online segment by a Build-to-Order strategy, both can be based on a product design in large with common parts.

To prevent that great products are created but completely distort your supply chain, but processes in place which evaluate and predict the impact of products and their specification in your supply chain. By helping product managers or designers/developers to predict the impact of their new products or product changes on total landed cost and other supply chain ramifications, we can create more efficient designs.

Sales & Operations planning allows you to integrate the various manufacturing processes.  A single, integrated Sales and Operations Planning (S&OP) process across all supply chain segments will align demand, supply and inventory, and allocate production capacity to the various supply chains based on actual and forecasted demand.

The best and most important reason to segment your supply chain, is customer value. If your strategy and supply chain is out of sync with your customer value proposition, customer service levels decline and inefficiencies increase. SC segmentation recognizes that different customer segments have different needs. Provide a responsive strategy focused on speed, order fulfilment, service level and customer satisfaction. This will help any company achieve lower inventory costs by increased responsiveness.