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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




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.


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.


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.


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



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.



Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited

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