Product Management
What is Product Management? In the first instance, organizations that want to gain better control of their stock to improve their life cycle management. A good way of doing so is to include a product management review in the Sales and Operations Planning (S&OP) cycle. By structurally involving product managers in the supply chain process,
What is Product Management?
In the first instance, organizations that want to gain better control of their stock to improve their life cycle management. A good way of doing so is to include a product management review in the Sales and Operations Planning (S&OP) cycle.
By structurally involving product managers in the supply chain process, you can significantly reduce the risk of obsolete stock or service issues. According to estimates, 7 out of 10 products are over-forecast while 3 out of 10 products are under-forecast.
When product managers are asked to repeatedly validate the forecasts for New Product Introductions (NPIs) and to substantiate the longer-term expectations, the forecasting becomes more precise. And by regularly stimulating them to phase out older, infrequently rotating products you stay in control of your portfolio.
How does it work?
To ensure smooth NPIs, better End-of-Life (EOL) management, and improve the forecasting of upcoming promotions, projects, and tenders, it is crucial to secure the right sponsorship within your organization. Supply Chain can find a good ally in Finance since they like all resources to be used efficiently and are keen to lower the working capital tied up in stock.
Furthermore, it is essential to clearly define the product management review meeting topics, to quickly prove the value via template reports and a pilot, and to continuously optimize by sharing best practices within your organization.
Ultimately, every organization’s goal is to get the best bang for its buck – in other words, to generate the best margin per invested dollar.
The Results of Good Product Management:
Customer Service Level
Reducing the risk of obsolete stock and out-of-stocks will reduce service issues. Questioning the Minimum Order Quantities (MOQs) leads to improved flexibility and hence benefits the customer.
Inventory
Well-thought-out NPIs, solid SKU rationalization as part of EOL management and better long-term event forecasting will prevent the stock capital from skyrocketing.
Working Capital Requirement
Striving for more return per invested dollar – rather than setting sales as the ultimate objective – will automatically lead to a better Return on Capital Employed (ROCE).
To ensure smooth NPIs, better End-of-Life (EOL) management and to improve the forecasting of upcoming promotions, projects and tenders, it is crucial to secure the right sponsorship within your organization.
On demand webinar
In this webinar Prof. Dr. Bram Desmet, CEO at Solventure talks about “Product Management Review as an essential part of your S&OP process”.
Download Vision Paper
Product Management