Customer Requirements and Segmentation

Fig. 3.17 Exemplary morphological box for identifying customer requirements and segments of...

The goal of this section of the SCD Guide CM1 Is the identification of customer requirements and a homogeneous segmentation of the present customers Into separate customer segments. In the following you can find analysis and methods to Identify customer requirements and customer segmentation. 

Naturally, customer requirements and needs could also have been added to the attributes of customer segments presented above. However, it was decided to discuss them separately, highlighting the customer orientation that is advocated by today s supply chain management researchers. 

Service offering per customer segment and product is defined Analyze importance of the customer (segment), customer requirements and the desired relationship strength, as well as the products served to define service offerings... 

It is crucial to know the requirements and service breakpoints of each customer segment (Fig. 22.3) and the related economic opportunities. Most successful players go as far as designing and tailoring differentiated supply chains and service level offers (Fig. 22.4), and tracking service levels and profitability to address service issues and extra costs. 

A product family is a set of products that are derived from a common platform (Meyer and Lehnerd 1997). Each individual product within the family (i.e., a product family member) is called a product variant. While possessing specific features/functionality to meet a particular set of customer requirements, aU product variants are similar in the sense that they share some common customer-perceived value, common structures, and/or common product technologies that form the platform of the family. A product family targets a certain market segment, whereas each product variant is developed to address a specific set of customer needs of the market segment. 

Family Design Model A complete design process is performed when market domain and customer requirements are connected with product architecture. Customer requirements identify the main market segments that need to... 

Establishing customer service and compliance requirements Establish customer requirements Provide/use performance metrics Requirements set with customer Provisions for VMI and CPFR Channel segmentation Compliance requirements defined... 

Channel A group of businesses that take ownership title to products or facilitate exchange during the marketing process from the original buyer to the final buyer. Effective SCM requires an understanding of the needs of each customer and segment and the correct channel to reach them. 

P D ratio According to the APICS Dictionary, lOtb edition, P is the manufacturing lead-time. D is the customer required delivery time. If the ratio exceeds 1.0, the customer order will be delayed or production will start as a result of a forecast (make-to-stock). The demand-driven supply chain approach argues that different segments of the supply chain can be driven by either forecasts or actual demand. In general, actual demand is more desirable than forecasts. In this book, we use cycle time to refer to processes for manufacture and distribution and lead-time as a market-driven requirement for delivery. 

While shifting operations to the Web can lead to dramatic savings, around the clock availability, and reduced customer waiting, many questions remain about adopting these new customer contact modes. For instance Which are the most effective contact modes for a particular segment-task combination How does service variety affect operational requirements What incentives should be used to improve customer satisfaction and operational efficiency across contact modes What are the competitive implications of various types of post-sale support ... 

With regard to the importance of an increased focus on customer requirements, it is crucial to differentiate between different customer segments. Satisfying customer requirements in many cases cannot be achieved by one single supply chain as customer requirements differ and vary across various marketplaces. 

If a one-size-fits-aU approach is applied, then not only are all customers of an organization treated in a similar manner, but all suppliers are also managed in a similar way. These factors lead to ineffectiveness in supply chain management. Hence, a clear focus of supply chain management should be the satisfaction of the various customer requirements accomplished by a segmented supply chain here compare Childerhouse and TowUl (2000) as depicted in Fig. 1.1. 

The descriptive part covers issues determining, for example, the product demanded for a defined customer segment. Moreover, it includes customer requirements such as product quality or price and defines which distribution channel fits best for the considered customer segment. However, this part takes into account the major points in the morphological box and thus, may vary depending on the preferences of a company. 

Albert 2003). As a result of effective segmentation, a company is endowed with comprehensive information about its customers and their requirements and needs, as well as about the company s competitive position and opportunities (Cooil et al. 2008). Closely related to the concept of market segmentation is the concept of customer segmentation. Here, an additional emphasis is put on the customers and their behavior (Marcus 1998). 

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