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Finding the perfect fit

By DANIEL SWAN, SANJAY PAL and MATT LIPPERT

In a world of increasing supply chain complexity, the "one size fits all" approach no longer works. Smart companies are segmenting their supply chains to match customers' needs —a practice that reduces costs and drives up service levels.

From the Quarter 04 2009 issue

Over the past decade, product-selling companies have seen complexity increase in every link of their supply chains, from customers to retail channels to manufacturing processes, and all the way back to raw-material supply. Driving this added complexity is consumers' demand for products that match their needs, tastes, and lifestyles. At the extreme, this market fragmentation has fueled the growth of mass customization, with companies like Timbuk2 or Nike manufacturing bags and shoes to individual consumers' requirements. But mass-market producers have been affected, too. Nokia, the electronics giant, now produces as many as 170 handset variants and 250 sales packages based on a single product platform....

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