Is the portfolio, volumes and lifecycles of your SKUs understood?
The next step in a complexity reduction activity is a detailed understanding of the target SKU portfolio. The scope of this may be certain brands, geographic areas, supply chains or perhaps your entire company portfolio.
For the chosen portfolio, you will need to understand:
- The description of each SKU – product, dose form, strength, volume.
- Where are they supplied from, which market(s) are they supplied to, which distribution lanes are used?
- What is the subsequent component range?
- What are the SKU volumes?
- What is the financial contribution of each SKU?
In addition, it is important to understand where each SKU is on its product lifecycle; are volumes increasing or decreasing. Typically, products go through lifecycle: launch, growth, maturity, and tail off. The value of portfolio complexity often varies through this lifecycle. Therefore, it is important to understand where a product is on its lifecycle as products where the volumes are likely to increase need to be considered differently from tail products where the volumes are declining.
This is the second of a series of 20 blogs giving a view of methods to deal with packaging complexity. Please help me improve the thinking by adding your comments and share this with others who may have a view.