A closer look at a Segmented Supply Chain Strategy
BY PUNEET SAXENA, VP Manufacturing Solutions Strategy
Leading manufacturing supply chains exhibit some common traits that result in superior performance. We call these traits the core tenets of high performance supply chains: Customer-centricity, segmentation, business-agility, synchronisation and optimisation.
Of the five core tenets of high performance supply chains, segmentation represents the most fundamental evolution in supply chain thinking. Manufacturing and distribution companies must cater to a wide range of customer needs as they serve increasingly diverse markets across dynamic global economies.
Understanding these needs and crafting attractive value propositions to serve them accordingly is becoming increasingly critical for profitable growth and business retention. Clearly, a one-size-fits-all supply chain strategy cannot adequately or profitably achieve this goal. Instead, companies must segment supply chain operations to balance cost to-serve with value to the business for each segment.
As an example, if you are a large consumer goods company with a significant portion of your revenue coming from Walmart, you likely have a team and a set of strategies dedicated to that account. The value of their business to you warrants this level of service. However, the cost-benefit ratio would not be positive if you applied this strategy to every mom-and-pop store that also buys your products. You probably have a different supply chain strategy for those customers.
Employing different strategies to serve different customers and channels based on their value to your business is what supply chain segmentation is all about. While the differences between supply chain segments may not always be as dramatic as the Walmart example, the principles and potential value are the same. That is why it is important to understand the ways companies are segmenting their supply chain strategies, how this segmentation impacts each supply chain process, and the role technology plays in enabling profitable segmentation.
Over the course of the webinar, we will look in more detail at segmented supply chain strategies and delve into the other core tenets, we will also provide examples from real companies and hear directly from a leading practitioner in the high tech industry at SanDisk Corporation who helped make these tenets a reality for his company, earning SanDisk Gartner’s Supply Chainnovator Award in 2014. Click here to register for the webinar.