The Power of Analytical Approaches Towards the Development of Differentiated Supply Chain Strategies: Case Study

Companies are facing challenging circumstances: markets are evolving; clients are becoming more and more demanding and unpredictable; product variety is rising; time windows are shrinking; and error tolerance is decreasing. Therefore, companies must adapt and improve their supply chains, develop a differentiated supply chain strategy to solve the supply–demand mismatch. So far, the main differentiation approach has been focused on: (a) product; (b) customer; and (c) market characteristics. This paper uses a case based research approach in the context of a business-to-business food company to analyse the use of analytical tools commonly applied in other fields of research to support the identification of product and customer characteristics relevant for supply chain strategy differentiation. Using daily recorded sales data over two operational years we apply the following methods: Principal Component Analysis (PCA) followed by Cluster Analysis (CA). A new differentiator (order corrections) is introduced, in between characteristic correlation is spotted and used to generate a more meaningful attributes (case specific), creating four product segments based on proximate characteristics. Therefore, by reducing a large product portfolio into manageable groups of homogeneous SKU’s it is possible to assign a proper set of supply chain tailored practices.