7 guidelines are provided for effective supply chain segmentation design: 1) Coordinate supply chain architecture around customer needs rather than existing capabilities, 2) Accurately determine real costs-to-serve for each segment by avoiding aggregations, 3) Tighten cross-functional collaboration to unlock new value propositions, 4) Select the optimal number of segments, typically between 3 to 5, 5) Make shared infrastructure the default to drive efficiencies and optimize profitability, 6) Realign resource plans to deliver the new segmented supply chain architecture, and 7) Create fresh visibility across the entire value network using relevant metrics and data.

1. 7 GUIDELINES FOR EFFECTIVE
SUPPLY CHAIN SEGMENTATION DESIGN
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For practical advice on supply chain segmentation strategy and design, download: How To Guide: Supply Chain Segmentation.
traccsolution.com/resources/supply-chain-segmentation-guide/
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LOOK OUT-TO-IN
Coordinate your supply chain
architecture to the customer,
not to your existing capability.
ESTABLISH REAL
COSTS-TO-SERVE (CTS)
Strip CTS to the bone –
aggregations or averages will
only skew your data.
EMPHATICALLY
STEER
COLLABORATION
Tighten
cross-functional
alignment to unlock
new value
propositions.
SIMPLIFY
APPROPRIATELY
Select the optimal
number of configurations
– supply chain leaders
have between 3 and 5.
REDESIGN WITH
RESTRAINT
Make shared infrastructure
the default to drive
efficiencies and optimise
profitability.
PLAN THE OPERATIONS
PROCEDURES AND
PROCESSES TO EXECUTE
Realign your resource plan
to deliver upon the new
architecture of a segmented
supply chain.
HEED THE METRICS
AND DIAGNOSTICS
Create fresh visibility
across the entire
value network with
relevant metrics and
data.