Many companies are moving towards supply chain segmentation because of the many benefits it can offer. Could it be right for you?
While conventional wisdom has always said that it’s simpler and more cost effective to run a single supply chain, today’s business environment is moving toward multiple supply chains. Different products, distribution strategies and supply constraints call for different supply responses and uniquely designed networks to deliver those responses.
Supply chain segmentation requires you to go through an extensive customer analysis, which will help you understand how customers are purchasing products and services and what combinations are profitable.
You also may be able to reduce costs by leveraging volume across various segments. How? Through leveraging economies of scale. For example, if you use standard components and leveraging procurement across segments, the manufacturing infrastructure can probably be used by all supply chains. You won’t need to dedicate production facilities to serve a specific customer segment.
You can configure solutions for customers based on standard components, or you can actually help design for supply chain. Instead of just taking what the product teams create, help them put in place processes and tools that accurately evaluate the impact of design and development decisions on the portfolio.
As for planning, supply chain segmentation can make it more efficient. 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.
Most of all, supply chain segmentation recognizes the different needs of different customers and provides a responsive strategy focused on speed, order fulfillment, service level and customer satisfaction.
In order to make these changes, you’re going to need people with a strong understanding of supply chain segmentation and its implementation. If you don’t employ them already, consider partnering with a recruiter who specializes in supply chain and is up to date on the latest trends in the industry. Sit down with your recruiter to discuss your business goals, which is critical to effective hiring.
Any questions? Contact Pamela Day at ZDA Supply Chain Recruiting. With her years of experience in the industry, she has her finger on the pulse of what’s happening and who can make it happen.