Supply Chain Segmentation aligns a portfolio of products, customers, and suppliers while harmonizing internal processes or policies. Segmentation enables serving different customer channels through dedicated and tailored supply chains.
Avoid "One-Size-Fits-All"
Typically, a “one-size-fits-all” approach, which serves customers from different channels through one supply chain, will...Show morecreate additional costs and inventories while simultaneously failing to meet customer requirements.
Re-design supply chain network
To reap all benefits, strategic network design decisions must consider Supply Chain Segmentation results. For example,...Show more reconfiguration of material assignment to warehouse location may be required to best support dedicated and tailored supply chains. This can result in a substantial decrease in inventory levels.
Functional and processual impacts
Supply Chain Segmentation directly impacts customer service, order management, and supply chain planning. Affiliated...Show moresystems and processes must function in accordance with segmentation outputs to realize efficiency gains and optimized working capital.
Does it sound familiar?
I have lower service levels than my competition, despite having higher inventories.
I do not understand why some of my items are notoriously out of stock, while others have excess inventory.
We are in constant firefighting mode due to long lead times and high cycle stocks.
We have low overall accuracy for our forecasts despite investing a lot of time and effort into our demand and supply planning process.
We experience long lead times and mediocre service levels from our suppliers.
Benefits
Segment specific service level targets
Detailed and parameter optimized inventory policies
Increase planning quality through a 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 does it work?
Our vast supply chain and IT expertise enable us to start immediately generating tangible results for your organization. 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.
With AIOinsights, we use your company’s master and transactional data to analyze your products in terms of their revenue contribution, availability and variability and display the results in dashboards. This constitutes the foundation of the supply chain segmentation.
With AIOintelligence, we evaluate improvement opportunities using advanced algorithms to propose sensible segmentation clusters. We also factor in strategic criteria related to customers, network footprint, and inventory levels, apart from the baseline analysis.
With AIOimpact, we identify, execute and monitor measures that help you implement your supply chain segmentation strategy. Benefits identified in AIOintelligence will be compared against actual savings to verify segmentation effectiveness. Supply chain segmentation not only consists of the optimization of several tasks in one segment, but rather it provides a complete supply chain approach: from goal setting to operational processes, including planning, sourcing, production, distribution, and returning materials.
In the first step specific segmentation, criteria are collected in a workshop and completed by standard supply chain criteria. Based on the criteria and their attributes, data collection provides a fact base for the segmentation process.
Based on the data collection we derive, a set of robust supply chain segments are calibrated by interviews and workshops. We describe each segment by major distinct criteria to achieve an initial picture of future potential segments.
Each segment fulfils a specific target and every process in the segment has to support its 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, including a complete description of the concepts, definitions of there specific restrictions and the prerequisite target support for the next phase. New concepts are also considered and checked for redundancies.
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”.
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