Supply Chain Segmentation

Supply Chain Segmentation aims at aligning a portfolio of products, customers and suppliers as well as internal processes or policies so that different customer channels are served by different, precisely tailored supply chains. The result of successful Supply Chain Segmentation is optimized customer service, profitability and working capital for each segment and for the company as a whole.

In a worst-case situation the “one-size-fits-all” approach will not meet any customers requirements but creates additional costs and inventory.

Does this sound familiar?

I have lower service levels than my competition, despite having higher stock.

I do not understand why some of my items are out of stock, while I am buries in stock for others at the same time.

We have long lead times, high cycle stocks and are facing constant troubleshooting.

Despite investing a lot of time and effort into our forecasting process, we only have low overall accuracy for our forecasts.

We experience long lead times and mediocre service levels from our suppliers.

Common pain points in Supply Chain Segmentation.

Does this sound familiar?

Demand forecasting tools require continuous maintenance from experts, and implementation and maintenance are expensive.
I do not have the expertise to do accurate forecasting, nor the time to maintain demand tools (and I do not want to employ someone fulltime to do so).
I do not have the know-how to continuously update my M/L forecasting models to volatile (VUCA) realities.
I don’t have the know-how to interpret the data and take action on these insights.
I do not have the right tools to apply modern algorithms beyond statistical forecasting.

Benefits

Segment specific service level targets

Detailed and parameter optimized inventory policies

Increase planning quality through suitable planning approach

Target high OEE and low-cycle stocks through detailed manufacturing

Differentiated sourcing improves supply chain responsiveness and efficiency

Increase customer revenue through customization

How it works

Supply chain segmentation comprises not only the optimization of some tasks in one segment, it provides a complete supply chain approach: from the goal setting to operational processes including planning , sourcing, production, distribution & returning materials.

We identify the supply chain segments, evaluate the best supply chain concepts for each process step and combine this to a supply chain approach for each segment.

In the first step specific segmentation criteria are identified in a workshop and complemented by good practice supply chain criteria. Based on the criteria and their attributes the data collection is started to provide a fact base for the segmentation process.

Based on the data collection we derive a set of robust initial supply chain segments and calibrate it by interviews and workshops. We describe each segment by major distinct criteria to achieve an initial picture of future potential segments.

Each segment fulfills a specific target and every process in the segment has to support this targets at best. It is crucial to derive the characteristic target profile for each segment also to align the organization and to establish the right metrics for performance management.

Several supply chain concepts are already in place. A complete description of the as-is concepts, the definition of there specific restrictions and target support is a prerequisite to the next phase. New concepts are also considered and checks for redundancies are done.

For each segment a specific supply chain framework is elaborated that fits best. It comprises the aim and the target of the segment, the major supply chain concepts for each process, the planning principles, the segmentation criteria and the segment “story”.

Supply Chain Segmentation

Does this sound familiar?

Does this sound familiar?

Benefits

How it works

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