Supply Chain Segmentation and Supply Chain Management Strategy

Supply Chain Segmentation and Supply Chain Management Strategy

Supply Chain Segmentation & Supply Chain Management Strategy

Today’s manufacturers need to understand how technology can help maintain their profitability. Many manufacturers still utilize an older supply chain segmentation strategy, which keeps them from moving towards more business success. As technology advances and the world becomes more complex, manufacturers must be sure their supply chain is efficient and profitable. Another common problem businesses face is building a successful supply chain management strategy. The true definition of supply chain management (SCM) is the “active streamlining of a business’ supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.” We’ll go over both of these issues below.

Supply Chain Segmentation

Supply chain segmentation is a process where companies can create profitable one-to-one relationships between their customers and their supply chains. The goal is to serve each customer and each product at a given point in time, with the best process, while helping to maximize customer service and company profitability.

Segmentation represents the most fundamental evolution in supply chain thinking. Customers have developed a wider range of needs as they increasingly serve global markets. Manufacturers must understand those needs and create value in order to serve them properly. It’s becoming more critical for profitable growth and business retention to segment supply chain operations to balance the cost to serve with the value to the business for each segment.

Employing different strategies to serve different customers and channels based on their value to your business is what supply chain segmentation is all about. 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.

In an age of growing complexity, manufacturers must ensure they understand the importance of an advanced supply chain segmentation strategy. If managing your supply chain is decreasing your productivity or causing excess inventory, you can outsource your purchasing and material management to AECI. Our mission is to provide the best possible customized solutions to meet every client’s immediate and long-term needs. AECI’s supply and material management programs lower the total cost of ownership, improve productivity, and can scale to meet production demands.

Supply Chain Management Strategy

Typically, SCM attempts to help link the production, shipment and distribution of a product or service. Companies can use SCM strategies to keep tighter control of internal inventories, internal production, distribution and sales – which allows them to deliver products to consumers faster and avoid storing excess materials with inventory reduction.

Every company struggles with balancing inventory supply and demand, but those which implement SCM strategies can overcome those obstacles. SCM drives more efficient performance within production, product development, and other crucial departments.

It may not be apparent right away, but one of the greatest benefits to a successful supply chain management strategy is the reduction of costs. If a company can achieve success with a supply chain management strategy, they could save thousands of dollars per day on spending for product materials, packaging, or even warehouse costs.

Storing excess inventory in a warehouse can waste valuable dollars. If your company does not have a supply chain management strategy and excess inventory is an issue, there are options to consider. A third-party like AECI can provide assistance and help consolidate or sell excess inventory on your behalf.

Contact us today for more information on how we can help with supply chain segmentation and an overall supply chain management strategy.