The product lifecycle is the evolution of a product, from invention to eventual discontinuation from the marketplace. All products have lifecycles and various models exist to describe each stage. We define the stages as New Product Introduction – Growth – Maturity – Patent Expiry – Divestment and Discontinuation.
Each stage of the product lifecycle requires alterations to capabilities and therefore it is important that you recognise the lifecycle stage of your products and ensure your finished goods supply capabilities are aligned to the needs of the stage of the product lifecycle:
In a company with a portfolio of products, at different lifecycle points this is a complex management challenge. Strong programme management to coordinate the impact from different products on the company’s capabilities is required.
We would recommend you start by mapping your product lifecycles. Determine the lifecycle model you want to use and define the characteristics of each lifecycle stage, including both the needs of products and the requirements on corporate capabilities. From this you can define what stage each of your products is at and assess any capability gaps you may have.
Products can have multiple lifecycles
Products can be launched at different times in different geographies and issues like patent protection can vary by territory. You can therefore be in a situation where a product is in divestment and discontinuation in one territory and yet in growth in another. This brings a further necessary dimension to your lifecycle planning, as you will have to consider these different territory effects on the lifecycle of the product. This increases complexity in your operations as, for such products, there will not be one standard solution across all operations.
Be clear on where the milestones are
As mentioned above, there are many different ways to describe the stages of your product lifecycle. Pick one and implement it universally across your organisation. You don’t want the added confusion of different parts of your company using different models and terminology. Moreover, agree what the key milestones are for the chosen lifecycle model and what triggers that milestone so that you can plan your portfolio at a corporate level.
Plan ahead with the next milestone in mind
You should be thinking ahead about the action you need to take before you reach a particular milestone. In some cases, the time between milestones is significant and there will be much change in the external environment outside of your control. In such cases, defining key potential scenarios, desired outcomes, risk mitigation plans and the time points or triggers for action is a more appropriate approach. As time progresses, these scenarios can be refined and enhanced to take account of emerging changes and mitigation strategies can be revised and developed as necessary.
A proactive approach such as this will help avoid surprises, managing risks rather than responding to issues and steering the responses of your company to meet the most favourable achievable outcomes.
Review performance after the lifecycle milestone
The point above emphasises the need to plan ahead to meet milestones but it is equally important to review your product’s performance after the milestone has been reached to determine if the actions taken were successful and if further activity is required. As an example, the implementation of multiple line extensions is often the action taken at patent expiry to segment market share and make it more difficult for generic manufacturers to cannibalise product volume.
However, it is rare to revisit the success of each line extension at some point after patent expiry, to determine which line extensions have been successful and should be retained versus those which gained minimal volume. These latter line extensions create significant portfolio complexity to provide low volume variants at a likely unfavourable product cost and therefore should be considered for discontinuation.
Whilst this example is particular to patent expiry there will be other actions at the other lifecycle milestones that result in non-optimal outcomes. A post milestone review will highlight such issues and allow remedial activities to be undertaken.