Supply chain segmentation is a means through which corporate alignments can bring together relationships between the consumers and the company’s supply. The method ensures that consumers in various channels associated with specific services get them through specific policies, processes of supply chain and modes of operation. This goal ensures that the best policies and processes in supply chain maximize the profits of the company and the customer gets the best service (Shah 108).
Implementation of supply chain segmentation
Segmentation is not only an inventory or network strategy, it is a strategy in the supply chain which impact is felt for several years. Policies that touch on the reasons why a customer should use a service or buy a product are necessary in order to realize full potential of segmentation.
One of the practices is regular analysis of cost-to-serve and data driven demand that ensures the information is available to be used in accommodating policies in supply chain, as well as service agreements. This promotes an increase in profitability in the portfolio and at the same time provision of services that are both suitable and reliable. Institutionalizing and performing the analysis on standard levels due to the frequent changes in the dynamics of profitability ensures that the demand is accomplished. (Plenert 87).
Another practice is implementation of core areas of differentiated demand policies. Whenever there is a consumer demand for products or services, the management should be able to give this a priority while taking into account segmentation strategies. The systems used in supply chain management should conform to high standards and able to identify the priorities for decision-making. Implementation of differentiated inventory policies is another practice. This involves finding out the amount of finished goods that are available in central distribution points in relation to those available in regional distribution centers. This helps in the determination of the size of inventory to carry out in a partly finished mode. It also helps to determine the components which help in dealing with higher demand variability and ensure cost reduction of products whose service requirements are different. (Thomas n.p.).
Implementation of differentiated programs for replenishment of customers is also important. There is the need to take statistics of the rate of selling goods at points of sale as this would affect the orders which manufactures receive from retailers. This would reduce the gap between low supply and high demand and vice versa and eventually increase the satisfaction of the consumer.
Implementation of programs for replenishing suppliers is vital. There should be use of both owned and hired companies, while also a consideration of their capabilities in service delivery both in volume and duration of deliver. This is in line with the process of ordering and the programs for customer replenishment that exists on the supply chain’s front end (Shah 110).
Regular analysis of sourcing for total-landed-cost is also important. Involvement of workflows covering procurement, engineering, and organization in supply chain in the analysis would be important during decision-making. A holistic view of costs should be the basis of the decisions.
Another area of major importance is the implementation of order promising and differentiated allocation. Allocation may involve reservation of inventory for other entities with an intention of preference provision to customers with ideas like profit, volume, and agreements of service levels in mind. Order promising involves provision of specific dates of product delivery that have high reliability levels (Plenert 89).
An incorporation of weekly and monthly tradeoff in the planning of operations and sales will help in coordination from end to end and ensure that business aligns to one plan. The company would put up the right plans that eventually increase service delivery to customers and profits to the company through making decisions. The business or company, while putting the plans and decisions in customer service, would increase its profits tremendously.
Continued learning and business optimization center would help in coming up with strategies, ensuring they are monitored and implemented as well as provide opportunities for learning the policies. The center would ensure the application of various functional levels (Plenert 90).
Strategies of implementation would be of great help in improving levels of serving the customers while also maximizing the profitability when deployed by a company. It would provide means of increasing the asset turnovers as well as improving customer service. Many benefits of both the nature of service and finances will ensure success of the organization.
Plenert, Gerhard J. Supply Chain Optimization through Segmentation and Analytics. Florida: CRC Press, 2014. Print.
Shah, Janat. Supply Chain Management: Text and Cases. New Jersey: Pearson Education, 2009. Print.
Thomas, Kelly. “Supply chain segmentation: 10 steps to greater profits”. Supply Chain Quartely. 2014. Web.