Whether it’s the food plant, lamp manufacturer, or toy maker, how many shades of grey you actually need to satisfy every taste and capture every customer is debatable. Growing product lines create a logistical yet operational nightmare if not properly planned or controlled.
Every additional SKU requires an extensive upfront set up: mold making, parts ordered, equipment calibrated, and trial runs. These are only a few of the contributing factors; the list continues. Not to mention production interruption from excessive changeovers that results in schedule delays and increased cost. Hidden costs tend to be under captured, overlooked, or underestimated when it comes to new product launch.
However, “The RIGHT customer is always right” trumps all. It’s not easy to balance efficiency and customer satisfaction. In the name of customer satisfaction, desire to increase market share or simply keeping current customers, companies accepted the fact that introducing new product is an unavoidable business expense. Marketing and Sales have no easy task. They have to predict economic trends and customer desires, while outperforming the competition.
Nevertheless, there are ways to minimize the impact of introducing new SKUs on efficiency:
Product Mix Production Optimization Process
ABCD Inventory Analysis
Insourcing vs. Outsourcing
“Teamwork Makes the Dream Work”
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