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
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
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.