Tag: sku reduction
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Stop product complexity at the door
In any manufacturing company that builds configurable products, there is a lot of discussion around what product complexity is. What’s interesting is that when times are good and there are lots of sales, the discussion is usually around how to simplify or streamline with the goal to sell more product even faster, that complexity is keeping sales from going even higher. In bad times, the discussion typically moves to how complexity is causing undue stress on the supply chain, creating problems with parts forecasting, quality and finished goods inventory.
Rarely do these discussions end with participants really agreeing about exactly what complexity is or how to reduce it. Solutions are attempted with internal projects like SKU reduction and part number reduction initiatives driven by Six Sigma teams that mean well and do good work, but usually are chasing the tail of the complexity dog, rather than leashing it for good and guiding it to higher profits, lower forecasting errors, even shorter sales cycles.
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