Supply Chain Segmentation Enabled

Leaders Will Use Supply Chain Segmentation to Win Today’s supply chains — stretched by globalization, outsourcing, and the rapid proliferation of SKUs and product configurations — are exceedingly complex.

They’re also exceedingly hard to manage. Some companies may have made the supply chain an area of strategic focus (Walmart and Zara in retail; P&G and Unilever in consumer product goods; Apple in consumer electronics), but even the most successful of them are now under intense new pressure to cut costs further: to do more with even less. All the while, customers are demanding more than ever: more customization, more service, and more intimacy.

The future belongs to companies who can profitably match their supply chains to the specific needs of their customer segments. Much has been written about the merits of supply chain segmentation, and few will disagree now with the rationale for it. The supply chain behind a high-volume, low-variability market segment might be geared for efficiency, while the supply chain behind a high-volume, highly-variable market segment might be designed for agility and responsiveness.