Supply Chain News Bites - Only from SCDigest

-Aug. 15, 2007


Supply Chain Graphic of the Week: Prioritizing Customer Service by Product Classification

  Customer Product-Action Matrix Provides Tool to Help Rationalize Service Policies, Focus on Highly Proftable Customers and SKUs  

By SCDigest Editorial Staff


How much effort and cost are you putting into customers and products that have small or maybe even negative profitability? Conversely, are you really providing the level of customer service that your more profitable customers should be receiving?

Those are questions most companies should be asking, but that relatively few do in a comprehensive way.

The most recent issue of the CSCMP's Explores publication looks at the integration of marketing and the supply chain, and includes the graphic below, originally developed by Deloitte Consulting.

Customer Product-Action Matrix

Source: CSCMP Explores, using Material Developed by Deloitte Consulting

While the implication of the matrix is worthy of a long article, in summary it offers a recommended set of service policies and supply chain strategies that considers both how profitable a customer is (A to D) and how profitable a product is (1-4). Using this or similar strategies forces companies to look much more closely at where they really drive their profit, and to make tough decisions that many would rather avoid.

What are your thoughts in the matrix? Have you used a similar approach? Let us know your thoughts at the Feedback button below.

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