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Product value‐density: managing diversity through supply chain segmentation

Antony Lovell (Clearpepper Ltd, London, UK)
Richard Saw (Cranfield University, Bedford, UK)
Jennifer Stimson (Cranfield University, Bedford, UK)

The International Journal of Logistics Management

ISSN: 0957-4093

Article publication date: 1 June 2005

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6304

Abstract

Purpose

Aims to identify the importance of segmentation both as part of the network design process and as an operational tool for correctly allocating products to appropriate supply chains.

Design/methodology/approach

The allocation is based upon a wide range of possible factors relating to the characteristics of the product, to the market, to the source and to the geographic/commercial context. The application of this framework is presented in a case study of a global electronics company, where large costs savings were achieved through the segmentation of supply chains.

Findings

A logical basis for segmentation is derived and an operational framework developed, which highlights the importance of product value density (PVD), throughput volume and product availability.

Originality/value

Demonstrates the paramount importance of throughput, demand variability/service factor and PVD as the key drivers in the segmentation process.

Keywords

Citation

Lovell, A., Saw, R. and Stimson, J. (2005), "Product value‐density: managing diversity through supply chain segmentation", The International Journal of Logistics Management, Vol. 16 No. 1, pp. 142-158. https://doi.org/10.1108/09574090510617394

Publisher

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Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited