Enabling supply chain segmentation through demand profiling

Abstract

PurposeWhilst there are a plethora of theoretical ideas regarding a segmented approach to supply chain strategy, there is paucity of empirical data. This paper aims to present the results of a field‐based case study in a fast moving consumer goods company (FMCGCo) that sought to identify the most relevant basis for supply chain segmentation.Design/methodology/approachResearch carried out on a single instrumental case, FMCGCo. A four‐stage research design was employed to develop and test an approach to developing a segmented supply chain strategy for FMCGCo supply chain Western Europe.FindingsThe study identified demand profiling at an item level (using volume and variability classifiers) as the primary driver of supply chain strategy. It also developed a novel profiling tool. This not only segmented demand but identified through the introduction of the concept of filters a method for turning the results of the demand profiling analysis into a segmented supply chain strategy.Research limitations/implicationsThe results presented are based on a single instrumental case. It is the approach that is transferable to other supply chain contexts not the specific solution per se.Practical implicationsThe paper presents a practical and pragmatic approach for companies to develop a segmented supply chain strategy based on demand profiling.Originality/valueThe introduction of a new tool as a practical and relatively quick means of developing a segmented supply chain strategy, that considers both market and product characteristics.