In current turbulent business environment, uncertainties often occur in unexpected ways. This causes difficulties for the firm to meet most of its customer demand. One of the widely regarded solutions of it is to improve its supply chain capabilities, which has been known as one of the resources of business competitiveness. As previous research in supply chain segmentation is conducted in a high volume and low variety context on firms who directly manufacture their product, the author saw this as an opportunity to further develop a framework of supply chain of low volume and high variety context.
Upon empirical investigation, three segmented supply chain strategy is identified, it is found that adoption of segmented strategy can result in 23% inventory reduction. Further sensitivity analysis also found that inventory can be reduced to over 50% with the application of accurate strategies in reducing product lead time, which is the key constraint for an outsourced manufacturing company. The design of segmentation process adds another dimension towards theory as the author believes this method will be the pioneering approach to this field of work which has never been studied before.