(2010; 40 pages)
Segmentation is an approach that can help identify opportunities in supply chains where products or customers can be grouped together or combined in such a way that improves product availability and decreases costs and functional redundancies (Allain et al. 2010). The framework strategically organizes the supply chain into distinct groupings or segments that have common logistics requirements, which best respond to customer needs. Each group is managed according to the characteristics of that group, aligning operating procedures with product and customer requirements. Technical advisors applied this framework in two states in Nigeria: Kano and Edo. Using requisition data from secondary hospitals, advisors determined the approximate demand of products that should flow through the state central medical stores (CMSs). These product and additional facility (customer) characteristics were used to suggest supply chain system designs modified for the unique situation in each of the states.
Though neither of the states was prepared to make drastic changes to their essential drugs and program-specific systems, the process of thinking through product and customer needs when designing a system was a useful exercise for all involved. Both states have expressed interest in further examining the feasibility of suggested modifications. Through this exercise, advisors were able to conclude that this framework is applicable in a global health supply chain setting, although to merge multiple program systems, this activity would have to be applied when a system design is already planned. However, use of data to inform system design decisions was a compelling argument for stakeholders to modify some logistics practices. Though facility level data is often challenging to acquire, when it is available similar exercises can inform system design decisions.