GOOD SEGMENTATION DRIVES VALUE CHAIN EXCELLENCE
Segmentation is a key strategic and tactical approach to reach operational excellence! In the context of effectively managing supply chains, a proper and suitable segmentation drives the focus, and thus the success of the supply chains linked to the various segments. Good segmentation is a real art, as it can be applied to many different areas, and in each case generates significant benefits for operations and customers. For a good supply chain oriented segmentation, the differences in products, processes, and customers regarding their delivery performance is the key driver. This can, of course, be linked to internal process time requirements, and particular other elements associated with the time and risks to have the product available. In our research we have identified that companies who use segmentation techniques more extensively are significantly more successful than companies without; this shows in their logistics cost, their inventory levels, and the delivery performance. Another key observation in this study was that companies using more customer and service level related segmentation have been more successful than companies using traditional categories. The example on the left shows in which order companies have used segmentations, and which priority they gave to each segmentation criterion.
Efficient SCM Responsive SCM Differentiation  Service offering  Service levels  Service pricing Segmentation  Products  Processes  Customers Flexibility  Lead time  Response time  Product range Productivity  Units per time  Low inventories  Order bundling Delivery  performance  Speed  On - time  Completeness  Required quality Focus on needs Design to needs Perform to needs Average  company Reliability  and Inventory leaders 1. Markets a nd Regions 2. Manufacturing  process and technologies 3. Product value 4. Product complexity 5. Sales  channel 6. Delivery frequency Segmentation  criteria identified in  study 1. Markets a nd Regions 2. Customer  groups 3. Service  levels 4. Sales  channel 5. Produkt  complexity 6. Manufacturing  process and technologies