How many supply chains do you really need?

© Artistashmita

An interesting blog by DHL examining supply chain segmentation. It has long been obvious that supply chains need to reflect different product types and customer requirements, but that can result in some incredibly complex strategic decisions, especially for large multinationals serving a multitude of markets and regions. For example, after HP acquired Compaq in 2001, “the $25bn deal was supposed to realise savings of $2.5bn, $1.8bn of which would come from streamlining the logistics and distribution network. But first, the company had to figure out how to combine some 25 separate supply chains”. It finally managed to reduce these to five, but deciding “how to slice the cake, however, was no easy task”, especially given the additional challenge presented by omni-channel retailing.