Inventory segment

In supply chain management, you can handle fulfillment across various channels, brands, and customer tiers. If you use the same pool of inventory to fulfill orders across channels, you can't ensure that priorities are fulfilled or that a fulfillment sequence occurs. Sterling Intelligent Promising provides an inventory segment feature that enables you to separate the inventory logically. As a result, you can isolate the fulfillment workflow for each segment.

By using this fulfillment strategy, you can plan the right time to organize the exact quantity of inventory items to fulfill each segment. Fulfillment profitability is improved and orders are managed successfully.

Segmentation

You can use the inventory segmentation process to divide your customers into different pools and assign inventory quantities to that pool. The segments are defined by the following fields:

Segment type: The category that is associated with the segment.
Segment value: The name of the specific segment.

For example, you can segment your inventory as follows:

Table 1. Sample inventory segments
Segment type	Segment values
Customer Tier	`Gold`, `Platinum`, `Diamond`
Brand	`IBM OMS`
Channel	`E-commerce`, `Walk-in`, `3rd party`

To define a segment, use the UI or the Create segments API. For more information, see Configuring segments.

Next, by including the segment type and segment in your request, you can assign the supply and demand to the required segment explicitly.

Sample of adjusting supply of 1 qty for channel: E-commerce segment

{
"supplies": [{
"itemId": "SKU1024", "shipNode": "Matrix-Store-001", "type": "ONHAND","eta": "1900-01-01T00:00:00Z", "shipByDate": "2500-01-01T00:00:00Z",
"segmentType": "Channel","segment": "E-commerce",
"changedQuantity": 1,
}]
}

When the inventory is assigned to a particular segment, the inventory is accessible to that segment. Other segments do not have access to the inventory. For example, when you query the availability for segment1, only supplies and demands that belong to segment1 are considered in the calculation.

To ensure that there is an adequate allocation of inventory to meet contractual requirements, you must devise an inventory plan for each segment. The plan must include the quantity of inventory to allocate and the time that the allocation occurs. With a business allocation plan, you take an iterative approach to fine-tune expected inventory distribution per segment and reduce the inventory holding cost.

Note: Balance the number of segments in your business. If you create too many segments, you might increase the complexity and control of your inventory and reduce fulfillment efficiency.

Segments are logical pools of inventory and Sterling Intelligent Promising supports both the segmented and unsegmented categories of segments.

Segmented inventory

Whenever you are expected to meet a financial or a contractual goal in your business, to simplify the effort, you can segment your inventory. This is also known as "ring-fencing". You can create a dedicated segment for each of these goals so they are given a high priority.

Unsegmented inventory

By default, unsegmented inventory is when you don't assign a segment definition to an inventory record, such as supply and demand. Inventory supply and demand that do not have a segment that is defined explicitly are considered unsegmented inventory. For example, when both the segment type and the segment value are empty or undefined. Unsegmented inventory is a special type of segment and it is supported out-of-the-box in Sterling Intelligent Promising. You don't need to configure this type of segment. Unsegmented inventory is mostly used by a general or a shared pool of inventory across any channel or business.

These are some of the day-to-day unsegmented inventory use cases:

Supply arrival:
When a new supply arrives at a fulfillment location, the warehouse manager assigns the new quantities to the unsegmented pool. It's unclear what consumes this inventory and how it is consumed. At a later stage, to meet a business need, you can convert the unsegmented inventory into segmented inventory.
Shared or unassigned inventory pool:
When an explicit pool of inventory is not required, the unsegmented inventory can be used as shared inventory across channels.
Supply synchronization:
On a daily or weekly basis, the inventory manager completes an inventory count. As the segment is a logical separation of inventory, the process is simplified by recording the inventory quantity against the unsegmented segment. At a later stage, a separate process can be used to distribute the inventory across segments. This is supported by using external logic or a segment allocation plan. For more information, see Segment allocation plan.

To demonstrate the logical separation of the same item at a fulfillment node, consider the following inventory snapshot:

Segment	Inventory availability
BrandStore	100 items
StoreFront	50 items
Warehouse	50 items
Unsegmented	200 items

The total inventory that might be stored on a shelf space is 100 + 50 + 50 + 200 = 400. However, during the availability lookup by the segment, the number of inventory is restricted to the inventory availability value that is defined. In this scenario, the unsegmented segment has 200 qty maximum and the StoreFront has 50 qty maximum available to sell.

The inventory availability in the unsegmented segment is limited to 200 items.

Watch this video to learn about the capabilities of inventory segment.