Industryweek 14851 Lean Supply Chain

Segmenting your Supply Chain for a Competitive Advantage

April 8, 2014

The concept of supply chain segmentation involves the alignment of customer channel demands and supply response capabilities that are optimized to maximize profitability and customer value across multiple market segments.

The rationale for this, according to an Ernst & Young “white paper” entitled Supply Chain Segmentation, is that the “business environment is getting increasingly complex, especially for technology companies dealing with rapid innovation, globalization and a growing number of business partners, business models and differences in expectations from different markets and customers.”

E&Y suggest five ways to consider segmentation:

  1. Product complexity based
  2. Supply chain risk based
  3. Manufacturing process and technology based
  4. Customer service needs based
  5. Market driven

The idea is that a “one size fits all” strategy won't work in today’s environment.

They suggest that while senior sponsorship is required for successful supply chain segmentation, you also need cross functional support from multiple organizational disciplines. The team must provide supporting policies, segment level processes and IT infrastructure to both automate the processes and provide metrics.

An example of this is Darden Restaurants owner of Olive Garden and Red Lobster restaurants which require unique supply chains to service over 300 million meals annually. While Darden’s supply chain is on the shallow side with, in many cases, only one tier of suppliers, they have four distinct supply chains… 1) smallware (linens, dishes, tableware, etc), 2) frozen, dry and canned products, 3) fresh food and 4) fresh seafood.

Many organizations may in fact have multiple, segmented supply chains but are not even aware of it. So whether your realize it or not, segmenting your supply chain may be a requirement to both survive and thrive in today’s  complex global economy.

Popular Sponsored Recommendations

Global Supply Chain Readiness Report: The Pandemic and Beyond

Sept. 23, 2022
Jabil and IndustryWeek look into how manufacturers are responding to supply chain woes.

Empowering the Modern Workforce: The Power of Connected Worker Technologies

March 1, 2024
Explore real-world strategies to boost worker safety, collaboration, training, and productivity in manufacturing. Emphasizing Industry 4.0, we'll discuss digitalization and automation...

How Manufacturers Can Optimize Operations with Weather Intelligence

Nov. 2, 2023
The bad news? Severe weather has emerged as one of the biggest threats to continuity and safety in manufacturing. The good news? The intelligence solutions that build weather ...

How Organizations Connect and Engage with Frontline Workers

June 14, 2023
Nearly 80% of the 2.7 billion workers across manufacturing, construction, healthcare, transportation, agriculture, hospitality, and education are frontline. Learn best practices...

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!