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Realizing Business Productivity Through Supply Chain Segmentation



Today’s demanding business environment is pushing manufacturers and distributors to rethink their traditional, one-size-fits-all supply chains and develop networks that can deftly segment and address specific customer needs, wants, and demands. The diversity across channels and customers, for example, requires organizations to sharpen their supply chain pencils and devise ways to serve everyone from the individual consumer who buys a single item online to the huge multinational conglomerate that purchases large quantities across multiple end items. Effectively serving both ends of this spectrum requires a high-performance, segmented supply chain approach.
Gartner defines supply chain segmentation as “Designing and operating distinctly different end-to-end value chains (from customers to suppliers) optimized by a combination of unique customer value, product attribute, manufacturing and supply capabilities, and business value considerations. In essence, supply chain segmentation is the dynamic alignment of customer channel demands and supply response capabilities optimized for net profitability across each segment.” Supply chain segmentation helps companies better sawtheir customers, develop standard lead delivery times, simplify management and reporting, curtail business costs, and attract new clients.  

In a recent study sponsored by JDA Software and conducted by Peerless Research Group (PRG) on behalf of Supply Chain Management Review, 140 supply chain executives having management and/or purchase decision responsibilities for supply chain solutions in manufacturing and warehousing operations offered input on their current supply chain infrastructures. Specifically, the research examined organizations’ adoption of a supply chain segmentation strategy and implementation, and how their investments and commitment to a segmented approach is delivering enhanced process efficiencies, better inventory management, and improved customer service.


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