ArticlesThe Art and Science of Part Segmentation in Inventory Planning

The Art and Science of Part Segmentation in Inventory Planning

Mastering Inventory Planning: The Strategic Power of Part Segmentation

Managing vast inventories of service parts is a complex challenge, with organizations juggling hundreds of thousands of SKUs. One of the most effective tools for optimizing inventory planning is part segmentation--grouping SKUs based on key attributes such as lifecycle stage, movement speed, or value. From warehousing efficiencies to pricing strategies, segmentation enables companies to streamline operations, reduce costs, and enhance service levels. By implementing segmentation techniques, businesses can fine-tune their supply chain to improve picking times, apply value-based pricing strategies, and optimize stock levels.

With advancements in computational capabilities, modern inventory planning software, such as PTC Servigistics' Multi-Echelon Optimization (MEO), now enables planners to optimize stock deployment at the most granular level. This shift has led to inventory reductions of 20-30%, making traditional manual tuning methods obsolete. Beyond efficiency gains, segmentation allows companies to tailor service levels based on brand positioning, critical part availability, and competitive dynamics, ultimately driving strategic advantages in supply chain management.

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