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January 20, 2012

Appliance Deployment: Segmented Supply Chains: Three Ways to Build a Competitive Advantage

By David Sims, TMCnet Contributing Editor


In these economic times a good way to stand out from the herd of vendors and suppliers is to be “all things to all people,” as a recent blog post from appliance deployment provider NEI (News - Alert) points out. In other words, if you can lead on cost, customer service and product innovation in supply chain management, well, that’s a heck of an advantage you’d have over your competition.

At the recent CSCMP conference in Philadelphia, NEI officials saw the 2011 Trends and Issues in Logistics and Transportation Study and gleaned three trends they see as becoming increasingly important in “customer-focused” supply chain management:

Segmented Supply Chains. No, this isn’t a new, novel concept, but NEI officials say the study shows that firms surveyed had “an average of more than three unique supply chains.” In fact, half of the 700 firms surveyed told researchers that they had “moved from a focused competitive strategy” to seeking to lead in a number of categories. And it’s probably no coincidence, as NEI officials point out, that firms adopting this approach had the highest average number of supply chains. NEI officials conclude that there’s a good chance, given the results, that “the various supply chains enable a company to focus on different strategies in different segments.”

Shortened and More Complex Product Life Cycles. Hey, we all want to develop and introduce products – “without jeopardizing existing products,” NEI officials note. One way to do this highlighted in the study is by sharing common operations and components or materials between product lines to cut down on expenses and find production efficiencies. And yes, it also has the advantage of “shortening product development, overlapping product life cycles and keeping costs down,” the study found.

Customers as Stakeholders in the S&OP Process. You want to involve key customers in the sales and operations planning process, as the study indicates. Done correctly, this can lead to getting a better sense of what the customer wants, improved production efficiency and more acceptable inventory management.

Segmented supply chains aren’t a magic bullet, but they do help in finding competitive advantages, as listed above, and NEI has experience to help you along the way.

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David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Jamie Epstein


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