Question

There are many different ways in which supply chains may be segmented. Select and explain one supply chain segmentation.

Answer 1

Answer: Supply chain is the one of the core part of any business as it is responsible for generating income by providing the product or service to its ultimate customer.

Supply chain segmentation is a process to serve different customers with different process of supply chain having different policies and procedures. These customers may be divided on the basis of channel , product they purchase ,region etc.

Few major approaches based on which supply chain is segmented are:

1. Market based: In this approach similar type of customers are handled in similar manner. This gives more importance to the needs of the customers.

2. Product based: In this approach supply chain is differentiated on the basis of the product or service provided.

3.Hybrid approach/ customer based : In this approach, segmentation is made on the basis of the customers needs and product combined.

Here I am explaining the product based supply chain segmentation,

Under this approach the product is given more focus. Segmentation is based on:

• the complexity of the product which means how many variants are there of each product.
• Price of the product. for ex- high price goods are delivered by totally different supply chain.
• Life cycle of the product : for ex- more delivery persons are hired to deliver goods with short life and are provided by local suppliers only.
• products which are innovative and new in the market are given absolutely different supply chain to maintain its higher quality and maintain its brand image. For ex- Audi showrooms and other cars of volkswagen are sold in different stores