Managing products profitability
With the progress of digitization, products are becoming more comparable, markets are becoming more dynamic and product life cycles are becoming increasingly shorter. A professionally designed product management approach for planning and controlling products is a key factor for companies operating successfully on a global level.
The ROI consulting approach to product management comprises four design dimensions along the entire product life cycle that are specifically interwoven with one another for your company: Product, Process, Product Data Model and Organisational Structure.
Profitable products safeguard sustainable corporate growth and represent the core in product management. This is why products must be aligned in such a manner that they make the best possible contribution to the company on a continuous basis. The tools necessary for this purpose are diverse and can be configured to meet the needs of the company. This can be done right from generating the idea to product range planning and product development right up to value analysis, variant management and end-of-life management: The wide experience of ROI Consulting has repeatedly contributed to enhancing the profitability of our customers.
Product Management is the link between Sales, Development and Management. The coordination of product management processes is extraordinarily complex and involves numerous activities and departments. Successful product management continuously interweaves the market view on the products with the internal process of the company. In the process, differentiating between the following three types of processes has proven to be beneficial in consulting:
- Strategic processes: Product portfolio management, product roadmapping, product repositioning, product strategies, sales & marketing strategies, etc.
- Core processes: Technology radar, requirements management, trend scouting, multi-site development, product launches in the market, product performance controlling or cost-down measures
- Supporting processes: Product documentation, market intelligence or the administration of PLM data
Not only the introduction of standardised processes but also the synchronisation of these processes with one another and ensuring compliance with the process continuously represent the lever for enhancing the efficiency in product management.
A consistent product data model plays a decisive role in this context, since an efficient orientation of the products towards profitability is possible only with the help of uniform product information. Starting with the levels in the product hierarchy right up to product attributes such as colour and material, development documents such as assembly drawings, production costs of comparable manufacturers and sales promoting marketing instruments like tutorials for certain areas of application, the following is applicable: This diversity of product data must be coupled and synchronised with one another with the help of IT support. In doing so, product management is the driver for the advanced development of the product data model along the entire product life cycle. Only an ingenious, intelligent and scalable product data model permits reliable evaluations – independent of the key users in your company. Based on our expertise, we are aware of how a large part of unnecessary capacity gets tied down by an inconsistent product model. Together with you we can find appropriate solutions.
Embedding the product management in the corporate organisation is decisive for its effectiveness. On the one hand, rigid coupling to operative functions such as product development or sales may inhibit the design of a profitable product portfolio. On the other hand, there is the risk that an independent product management gets decoupled from other functions and, as a result, the expected "networking" activities in the company get lost. Therefore, the design of product management organisation is a critical issue that needs to be addressed with expertise and good judgement.
In short, the management consultants at ROI can help you to structure and optimise your company-specific product management while always keeping the real value addition in mind.
Product Lifecycle Optimization – A formula for efficiency
A shining success typically also has its drawbacks. This was the experience of a pharmaceutical group that had reached the top of its industry with an extensive portfolio of hospital and pharmaceutical products. But after experiencing growth on a global scale within its heavily decentralized organization and delivering strong balance sheets, over the years the company lost sight of key areas like structures and process Standards. With the help of ROI, the company responded quickly, and in just nine months drew up a specific plan of action for its worldwide Product Lifecycle Management (PLM) system.