A company’s supply chain and sales operations significantly impact its financial performance. That is why it is critical to have a robust sales & operations planning (S&OP) process in place. A key component of the S&OP process is a product portfolio review, which comprehensively evaluates the product lifecycle plans and changes during the S&OP planning period.
Table of contents
What is a Product Portfolio Review in the Sales & Operations Planning (S&OP) Process?
A portfolio review is a systematic evaluation of the impact of product portfolio changes on the demand plan, supply plan, inventory plan and corporate financial objectives. It goes beyond simply looking at new products and their potential impact on demand to include a review of the entire product lifecycle, from product rationalization to product development status. The portfolio review measures and tracks the performance of the product development process to ensure that the company’s supply chain operations are aligned with its corporate goals and financial objectives.
Elements of a Product Portfolio Review
A portfolio review includes the following key elements:
- Product Rationalization -A review of new and existing products and product lines to determine whether they should be reduced, discontinued or maintained. This review considers estimated volume, overhead, margins, launch and first-year volumes and the total and remaining lifecycle estimates.
- New Product Plan – An evaluation of the expected volumes, launch and annual of new products and their impact on the company’s supply chain operations, including manufacturing and sourcing plans, distribution plans, customer collaborations and marketing and promotions plan.
- Mid-Lifecycle Product Plan – A review of product rationalization changes, new or changing customer collaborations, manufacturing and sourcing changes, new distribution plans and new marketing and promotions.
- End-of-Life Product Plan – A review of product rationalization changes and new customer collaborations as a product nears the end of its lifecycle.
- Product Development Status – A review of the metrics and KPIs used to measure the performance of the product development process, including stage and gate decisions.
- Manufacturing and Sourcing Plans – Decisions related to manufacturing and sourcing capacities are based on demand volumes to ensure that the company can meet its customers’ needs while maintaining profitability.
Benefits of a Product Portfolio Review
A portfolio review is an essential component of the S&OP process that helps companies align their supply chain operations with their corporate goals and financial objectives. By evaluating product lifecycle plans and changes, companies can make informed decisions that impact demand, supply, inventory and overall financial performance. Including a portfolio review in the S&OP process is a critical step in achieving operational excellence and maximizing supply chain efficiency.
Conclusion
An organization’s supply chain is intertwined with its financial health; when one experiences disruption, the other is not far behind. This is why it is critical for your supply chain strategy to include a detailed S&OP process and a portfolio review. This will ensure that your supply chain operations are aligned with your corporate goals and financial objectives, creating resilience and flexibility throughout your organization.
enVista’s supply chain strategy team can help. Contact us today to speak with an expert and learn more about how you can implement a portfolio review into your supply chain operations. Let’s have a conversation.®
