Comments on: SKU Rationalization: Improving Forecast Accuracy and Profitability

By: Kevin J. Mayer

Kevin J. Mayer — Fri, 24 Aug 2012 23:36:04 +0000

Any approach needs to be viewed with a mix of rational thinking (i.e. quantitative analysis) and a dose of emotional attachment(i.e. gut feeling and/or experience). Sometimes a “gem” takes a bit to catch hold and that emotional decision to not prune too quickly will payoff.

By: Jens Ellegaard

Jens Ellegaard — Thu, 23 Aug 2012 06:58:25 +0000

I would recommend you guys to google around on the words “complexity management”

By: Bala Subramanian

Bala Subramanian — Wed, 22 Aug 2012 15:08:00 +0000

I always believe that volume, value and margin should be a three dimensional view to evaluate the performance of the product as this gives a better view of low volume high value matrix to make informed decision. Performing this exercise periodically automatically dictates the product life cycle. Pruning a product as part of forecasting can help alleviate issues related to poor profitability and locking cash in inventory. Including customer profitability can provide an additional dimension on the customer product mix.

By: Dean Maple

Dean Maple — Wed, 22 Aug 2012 00:33:16 +0000

Very interesting . I had similar experience at a major grocery products company. One of the interesting points there was the way that the store brand sku’s impacted company brand sales , mfg capacity and obsolescence. A review of the production schedule in one plant found product moving down the canning line at the same time that duplicate Sks’s were placed on the scrap list of aged inventory.
Another key issue was impact on regional brands with acquisition of competitive brands in the same market.

The grocery products industry is a true science in the forecasting business.