As an inventory-based business, you may keep track of a great deal of data that provides you with critical insights into how your products are performing, how much inventory you need, and where that inventory needs to come from. As part of that data, you must pay close attention to both overall product lifecycle management and your supply chain planning. Combining those initiatives can provide you with deeper-level insights into what your business really needs to keep up with the inventory your business may need.
Evaluate Your Changing Inventory Needs
Product lifecycle management helps you keep up with how much inventory you need to have on hand to satisfy customer demand. Your product will move through multiple stages throughout the time you spend selling it.
Product Launch/Introduction
During the launch stage, a new product hits the market. Demand may be very high during this initial stage as buyers rush to acquire that item. Depending on the type of product you’re selling, many buyers will want to be the first to acquire it, and you do not want to miss the opportunity to sell as much of the product as possible.
Managing your supply chain planning effectively during the product launch stage is essential. You may need to:
- Build up inventory for the initial launch, ensuring that there is enough of the product at each of your locations to meet that high initial demand. While some product scarcity can help drive increased interest and sales, extreme scarcity can increase customer frustration and decrease demand.
- Ensure that you have the right stock moving into each physical location of your business throughout the duration of that launch period. In some areas, a product may be more vital or sell faster than others, so you may need to be able to move inventory quickly.
- Prepare to ramp up production quickly in case demand exceeds what you initially expected.
Paying close attention to your supply chain planning prior to a product launch can set you up for a more successful launch.
Growth
During the growth stage, the product will continue to grow in popularity. If you introduced a new product to a new market, you may not fully know how much interest in your product will grow ahead of time.
During this stage, having a dynamic, responsive supply chain is critical. You need to be able to increase production to keep up with demand, especially once you move beyond the initial launch stage. Your customers do not want to have to wait to get your product in their hands, especially if you have a product that they need to replace regularly (like consumable items). If your demand increases suddenly, you need to also be able to increase your supply quickly.
Maturity
During the maturity phase of your product lifecycle, your product sales will settle into a predictable pattern. While you may have natural ebb and flow of sales based on seasonal demand and other cycles, you can expect relatively consistent sales during this period.
Your supply chain planning, however, remains critical. During the maturity stage, you want to be sure that you can continue to meet consumer demand. You no longer have a new or rapidly growing product, so your customers will expect you to have a reasonable supply on hand to meet their ongoing needs.
Your supply chain needs to be responsive, dynamic, and able to weather potential snags and snarls, including supply chain problems.
You may need to consider things like whether you have multiple sources for key supplies or products. Further, you need to manage your inventory very effectively to maximize your profits while keeping up with customer needs. You may, for example, need to move inventory from one location to another when you notice demand shifting between them.
During the maturity stage, you may also want to carefully note signs that you may be nearing the product’s overall decline. The length of the maturity phase may depend on a variety of factors, including what type of product you have and what place it fills in the market. As you start to notice signs of decline, you may need to change your ordering practices or start to plan how to manage excess inventory.
Decline
As interest in and need for your product starts to decline, your needs, as a business, may change. You may spend more of your supply chain management time shifting inventory between one business and another, especially if you have considerable differences between locations.
You may need to take a closer look at your suppliers during the decline phase, too: sourcing materials or products as inexpensively as possible may be more practical during this stage, especially if you aren’t sure how fast sales for your product will decline.
Eventually, you may be ready to pull the product from the market entirely. That may mean that you no longer need many of the raw materials and components that you have sourced over time.
During this period, you may want to carefully evaluate your ordering to get a better feel for how many of those components you really need to ensure that you do not end up with excess materials on hand that you no longer have a use for.
You may need to review your contracts to make sure that you will not experience unexpected fines and fees if you do not continue to bring in those orders. Effective product lifecycle management can help you prepare that essential documentation ahead of time, which may put you in a better position to negotiate those contracts in the way that best benefits you.
Do You Need Help with Supply Chain Planning and Product Lifecycle Management Solutions?
At StockIQ, we provide products that can help you predict and analyze demand, keep up with seasonal needs, and manage your supply chain more effectively. Contact us today to learn more about our solutions and how they can help you achieve your business goals.
