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Supply Chain Segmentation: Time for a Refresher?

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Jennifer Baljko
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Re: upstream and downstream
Jennifer Baljko   1/7/2013 9:00:26 AM
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Hi Greg - That's exactly the rub - segmentation is a good idea, but it's the way people approach it that could create the inefficiency. Companies can't simply go from one blanket supply chain solution to segmentation without making critical strategic adjustments. All of the things you mention and more - total cost of ownership, partner communications, metrics, and clearly defined objectives - are parts of that conversation and transition.

Bolaji Ojo
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Re: upstream and downstream
Bolaji Ojo   1/3/2013 6:29:16 PM
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Well noted Greg. Jennifer Baljko may agree with you but I'll let her respond directly to your comments. She's written another blog for EBN that directly addresses the application of Supply Chain Segmentation. It might answer some of the questions you raised.

Greg Riemer
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upstream and downstream
Greg Riemer   1/3/2013 4:10:13 PM
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Personally I think segmentation is a good concept and works as long as it doesn't create inefficiencies. You also have a chance to lose key information like total landed costs, that can result when silos are created within the supply chain. You often see segmentation take place in the upstream and downstream supply chains for certain companies. However, in this instance I don't think it works and most of the time is caused because of lack of overall communication between certain parties.

Jennifer Baljko
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Re: not sure
Jennifer Baljko   1/3/2013 5:13:29 AM
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FlyingScot - Think it's still a concept that are companies are exploring, and we'll likey see fits and starts in the tech sector. It does, however, seem likewe've reach another supply chain milestone where companies have to take the expertise they have developed/curated the last decade or so, and consider how particular parts of the chain could benefit from a higher degree of customization, where it makes sense financial and resourcewise.

Jennifer Baljko
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Re: Supply chain segmentation
Jennifer Baljko   1/3/2013 5:09:49 AM
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Barbara - I think you're right -- it comes down to how efficient different supply chains can be managed. I keep thinking there will be this blended supply chain approach - some parts of the supply will be kept in-house (or brought back in house) because it creates ceratin speed or flexibility  advantages in key areas with key customers. And "bulk"processes that can be applied across the the board without high-degrees of specialization will be farmed out. We'll see.

FLYINGSCOT
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Supply Network Guru
not sure
FLYINGSCOT   1/3/2013 5:03:30 AM
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I have not seen too many successful companies with segmented supply chains.  It seems to me that most companies develop a chain that works for the bulk of their customers and then one needs to take it or leave it.  Ryanair is a good (or bad) example. I will start looking into this though.

Barbara Jorgensen
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Supply chain segmentation
Barbara Jorgensen   1/2/2013 1:56:01 PM
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I'm intrigued by the idea that several supply chains can be configured inside one company so each chain can be efficient. As long as a company can consolidate the common functions: RFQs, BOMs, financial transactions, common suppliers and shipping, it also makes financial sense. But it seems to me it would be easier to outsource the whole process to a wholesaler, rather than try to manage separate supply chains in-house.



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