Optimizing a Go-to-Market Capability
A highly successful global technology product and service company had a well-established, multi-continent manufacturing, assembly, and distribution system. This system was designed to support complex products that required extremely high levels of customer care. The company was struggling to rationalize this important capability with the reality that a greater percentage of its product line required a low-cost supply chain in order to be competitive. It came to Analysis Group to help address this problem.
Analysis Group quickly helped the company recognize the need for a two-tier global supply chain, and the client set these plans in motion. More vexing to senior management was the question of how to determine the circumstances under which one of the other supply chain capabilities was to be utilized. For example, while customer-based segmentation was appealing to the sales team, many large customers bought a mixture of highly customized and more commoditized products. The solution Analysis Group helped the client implement was based upon two product-related questions:
Was the client in a position to capture substantial value from that particular product line -- in other words, where in the value chain were profits accruing? And was that ability to capture value shifting to favor the client more or less over time? By applying a rigorous, forward-looking and economically based segmentation approach, the client was able to more effectively manage both costs and service.