Complimentary Gartner® Report
Optimize SKU Segmentation with Inventory Calculation to Optimize Supply Plan Alignment

“Due to significant differences in demand behavior and profitability, a single approach to supply, whether based on lowest cost or maximum service, will often not result in the best total performance.”

Gartner presents key findings for companies struggling with inventory performance and calls for the evolution of planning processes.

  • Inventory performance problems are often a reflection of single-minded supply strategies that attempt to serve a complex portfolio of products, parts or materials with a uniform supply strategy biased toward minimizing cost.
  • The term “inventory segmentation” is often used to describe a differentiated approach to supply (which includes inventory) for better balance within a portfolio of products, parts or raw materials.
  • Segmentation exercises focused on strategy development miss out on opportunities to drive immediate performance improvement.
  • Differentiated supply plans based on fixed parameters by segment (such as inventory targets) sacrifice the performance benefits of inventory analysis for increased SKU-level precision.

Download this complimentary Gartner report for a guide on how to redesign and improve your planning process.

Maverick Research: The Digital Era – The End of S&OP?, Pia Orup Lund and Cristina Carvallo, 27 June 2022

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