Should you Consider Supply Chain Segmentation?

Supply-Chain-SegmentationBusiness success is contingent on maintaining a competitive edge.  Maximizing supply chain activities allows businesses to operate at highly proficient and effective levels.  Supply chain management integrates all facets of business operation and production, including product development, procurement, construction, and logistics.  Businesses are discovering that they are unable to maximize customer value using a single supply chain strategy.  The same supply chain stratagem will satisfy some customers but the desires of other consumers may go unfulfilled, and for others, the costs may be too great. As a business owner, should you consider supply chain segmentation?  The answer is yes.

Supply chain segmentation means grouping services or faculties together to meet an explicit set of requirements.   Segmentation allows businesses to meet their customer needs at the lowest cost.  It provides an organizational framework that consistently delivers value and business control the complete life progression of a product.  Supply chain segmentation generally follows these steps:

Step One – Group Products and Delivery Channels

The first step for segmentation involves grouping products and delivery methods and creating a matrix, where all combinations are represented.  Each combination is considered an individual supply chain.  The distinct supply chains are rated using business revenue factors of gross profitability and sales.  Continue reading