Supply Chain Segmentation - the Secret to Omnichannel Success

Meagan Douglas
Mon, Dec 21, 2015
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Warehouse segmentation helps track diverse inventory.

As companies grow, individual distribution and warehouse management solutions may prove inadequate. An expanding consumer audience will have diverse needs. Offering products in multiple territories or on different sales channels means businesses need new shipping practices.

Many organizations respond to new obstacles by segmenting their supply chain. Instead of working with a single solution for multiple challenges, they utilize flexible systems that can meet the particular needs of sales channels, consumers, products and regions.

Sales Channel
The most common way modern companies expand their offerings is by introducing e-commerce into their normal operations. Online shopping grows more popular every day. If a business doesn't provide inventory for Internet sales channels it could lose customers to digital competitors.

Each sales channel may have certain demands for distribution. A company must ensure its has products available for consumers that place orders online, over the phone or in person. Electronic Products and Technology said a primary goal for supply chain segmentation is to ensure customers don't ever come across stockouts. Inventory management solutions must recognize the demand of each channel and prep the warehouse accordingly.

Warehouse segmentation procedures can begin by literally dividing warehouse space based on sale channels. Managers should assign certain shelves or aisles for e-commerce customers. A warehouse management software solution should provide visibility of each inventory segment. Employees using real-time automated data collection devices can create records for channel performance.

A centralized solution helps users compare historical data to current inventory based on the metrics the company assigns. Warehouse workers in charge of the e-commerce section can use mobile data collection devices to make sure product availability matches the needs of the sales channel on a daily basis.

Consumer Group
Customers utilizing particular channels may have special demands. E-commerce shoppers usually prioritize shipping schedules and longtime clients may have individual requests. If a company has solutions for consumer data collection, they can build supply chains that provide special services for each of their customers.

The supply chain itself could determine how much a customer pays for a product. A PricewaterhouseCoopers report analyzed how current industries use supply chain segmentation and discovered many business found success by providing different levels of distribution services at unique prices. This solution puts the power in the hands of the consumer. A shopper can choose what type of supply chain options best suit his or her needs.

Warehouse workers need real-time automated data collection solutions to quickly respond to consumer communications. If a sales team takes in particular details about orders, the company needs a system that instantly provides the distribution center with the necessary information. Warehouse segmentation policies help employees put certain products aside as soon as they receive special orders.

Product Demand
Many manufacturers are used to responding to unique consumer demands. Production lines may create merchandise based on what a single client needs in terms of performance. These products will have very particular supply chain journeys, and warehouse managers must watch their treks alongside normal operations.

Managers could segment warehouse options based on a variety of product details. Supply Chain Quarterly suggested high-demand products may need their own section. Keeping merchandise with fast turnaround close to the loading dock and easy to reach speeds up warehouse operations, while it may be best to keep other items in long term storage.

Perishable or fragile products need constant supervision. Working with mobile automated data collection devices can reference merchandise storage needs as they move items around a segmented warehouse.

Distribution Region
As a business expands, it may open locations in new territories. Different states and countries have unique government regulations and taxes. A centralized warehouse management system can segment a supply chain based on region to stay compliant and avoid wasting time and resources.

A territory may have its own standards for consumer safety. Segmenting a warehouse can help managers trace which product came from which business facility. If regulators or consumers detect a problem, a lack of visibility could cause a company to recall all of its products instead of just the ones potentially affected by contaminants or improper storage.

Automated data collection services are helpful for staying compliant with multiple tax codes and regulations. A centralized solution should instantly convert data based on region after proper implementation. The right system allows companies to expand without wasting time on regional obstacles.

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