m product launch can be very stressful for your supply chain, especially when it has been over-extended. However, in many cases, the product might still be necessary to grow the business.
So what do you do in such a situation?
In this article, we explore the three principles or items that will help your supply chain management successfully take a new product to the market.
What are these principles?
- Make or Buy Analysis
- Demand Forecasting
- Check for SKU Proliferation
If you can get these principles in place, the product launch becomes very easy for your supply chain.
1. Make or Buy Analysis
The make-or-buy analysis is a very important component of any supply chain planning because it allows for an in-depth analysis of the state of the supply chain.
Make or buy analysis helps you in determining whether or not to take on or outsource certain aspects of the supply chain operation.
When launching a product, in many cases, there are new processes that have to be undertaken. Chances are you will need to source new vendors for raw materials and services.
It is important to determine whether or not your supply chain can handle these processes. To handle it, the supply chain will need the right infrastructure and the right resources.
If these are not in place, it will be challenging to handle these processes successfully. In many cases, the lack of resources is why businesses outsource them.
It could be the warehouse or production aspect of the supply chain operations required to develop and deliver the product to the market.
When deciding on make or buy, it is important to ensure that whatever option you decide on, the necessary resources are available.
2. Demand Forecasting
In any product launch, it is normal to get excited or sometimes worried about the market reception of the product. This is what prompts marketing or market research.
No matter how great the product is, if there is no demand for it, your product is wasted.
On the other hand, if you have a very good product but the demand is more than you thought it would be, your supply chain will end up stressed.
It will be either trying to keep up with the demand or dropping supply to the demand level. Either way, it puts an unnecessary stress on the entire operation.
This is why demand forecasting is very important. With a good demand planning and forecasting system, you can accurately predict the demand for the new product.
Accurate forecasting enables you to prepare your supply infrastructure better to match the demands. This helps prevent overstocking or stockouts in the supply chain.
In order not to miss it, you need to determine what exactly the market wants, how they want it, and what they will pay for it. This is what informs your supply planning.
3. Check for SKU Proliferation
SKU proliferation occurs when the supply chain or business has too many products in its inventory and not enough are selling out.
This is typical in Africa. A business, in its bid to reach more customers and sell more products, will typically invest in many SKUs. But often, they end up with products that aren’t selling as they thought they would.
The reason is usually poor forecasting or lack of research, which is typical among many small businesses. Stacking products without boundaries will only stress the supply chain.
In the case of a product launch, it is important to check the supply chain for products that are now redundant. And look for optimal ways to get rid of them.
This could be through discount sales or giveaway promotions. Getting rid of older SKUs tends to free up space, whether in the warehouse or capital invested in them.
This allows the supply chain to effectively push the new product into the market relatively easily.
Pushing a new product without consulting the supply chain management team can cause problems for the business. I see many businesses do that. Their mistake is that they don’t think the supply chain can help.
They couldn’t be more wrong. The three supply chain principles listed above will be useful in any product launch.
𝗣𝘂𝘀𝗵𝗶𝗻𝗴 𝗮 𝗻𝗲𝘄 𝗽𝗿𝗼𝗱𝘂𝗰𝘁 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗰𝗼𝗻𝘀𝘂𝗹𝘁𝗶𝗻𝗴 𝘁𝗵𝗲 𝘀𝘂𝗽𝗽𝗹𝘆 𝗰𝗵𝗮𝗶𝗻 𝗺𝗮𝗻𝗮𝗴𝗲𝗺𝗲𝗻𝘁 𝘁𝗲𝗮𝗺 𝗰𝗮𝗻 𝗰𝗮𝘂𝘀𝗲 𝗮𝗹𝗹 𝗺𝗮𝗻𝗻𝗲𝗿 𝗼𝗳 𝗽𝗿𝗼𝗯𝗹𝗲𝗺𝘀 𝗳𝗼𝗿 𝘁𝗵𝗲 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀. 𝗜 𝘀𝗲𝗲 𝗺𝗮𝗻𝘆 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀𝗲𝘀 𝗱𝗼 𝘁𝗵𝗮𝘁. 𝗧𝗵𝗲 𝗺𝗶𝘀𝘁𝗮𝗸𝗲 𝘁𝗵𝗲𝘆 𝗺𝗮𝗸𝗲 𝗶𝘀 𝘁𝗵𝗮𝘁 𝘁𝗵𝗲𝘆 𝗱𝗼𝗻’𝘁 𝘁𝗵𝗶𝗻𝗸 𝘁𝗵𝗲 𝘀𝘂𝗽𝗽𝗹𝘆 𝗰𝗵𝗮𝗶𝗻 𝗰𝗮𝗻 𝗵𝗲𝗹𝗽.
𝗧𝗵𝗲𝘆 𝗰𝗼𝘂𝗹𝗱𝗻’𝘁 𝗯𝗲 𝗺𝗼𝗿𝗲 𝘄𝗿𝗼𝗻𝗴. 𝗧𝗵𝗲 𝘁𝗵𝗿𝗲𝗲 𝘀𝘂𝗽𝗽𝗹𝘆 𝗰𝗵𝗮𝗶𝗻 𝗽𝗿𝗶𝗻𝗰𝗶𝗽𝗹𝗲𝘀 𝗹𝗶𝘀𝘁𝗲𝗱 𝗮𝗯𝗼𝘃𝗲 𝘄𝗶𝗹𝗹 𝗰𝗼𝗺𝗲 𝗶𝗻 𝗵𝗮𝗻𝗱𝘆 𝗶𝗻 𝗮𝗻𝘆 𝗽𝗿𝗼𝗱𝘂𝗰𝘁 𝗹𝗮𝘂𝗻𝗰𝗵.
Obinabo Tochukwu Tabansi is an ex-supply chain professional turned ghostwriter with a decade of experience working in different facets of the supply chain. Today, he lives his passion for writing on all things supply chain and helping clients from across the globe communicate their thoughts and solutions seamlessly. His blog, Supply Chain Nuggets, is Africa’s fastest-rising supply chain blog, helping professionals, business owners, and curious minds navigate the continent’s complexities.
