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Accountability… Who Owns It?


Lloyd Sheather
Managing Director, Demand Management Systems

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Who maintains the Product Range ?

  • Not I! said the Sales Manager, our challenge is hard enough increasing sales.
  • Not I! said the Marketing Manager, we have too many promotional advertising campaigns to organize.
  • Not I! was the firm response from the IT Manager, we ensure that the computer processes all the data effectively.
  • Not I! said the Accountants, we are overloaded with measuring everyone else’s activity.

So who does maintain the Product Range?…

I challenge that it is a question worth exploring in your organization.

While these questions may exaggerate the reaction from many within the Company, it is surprising how many organisations do not appear to have a clear line of accountability for the management of the Product Range and the associated data that represents that product range.

The conventional wisdom is that marketing are the custodians of the Product Range. They organize the new product programs and should therefore follow through the planned obsolescence of products.

I have observed in a number of Companies that although Marketing initiates the majority of Product Range decisions, the task of Product Range data management is not defined but falls by default onto the shoulders of the Demand Manager. Someone or some group must be responsible for the challenge of ensuring data integrity of the companies Product Range.

Perhaps this is the appropriate function for this activity. In organizations working with Demand Solutions™, the Demand Manager certainly has access to a powerful tool for the management of the key data of the product range.

The variety of data management tasks are essential for the smooth operation of the business.

By identifying some of the tasks essential for the efficient maintenance of the Product Range, it becomes apparent that there is a match, between the requirements of the tasks to be performed, and the functionality available within Demand Solutions™:

  • Ensure supercessions are identified and activated
  • Review all new items added to the range, to ensure correct data base information
  • Regularly review the Pareto ABC ranking through a variety of approaches, consider ranking the data into 4 or 5 categories of detail – An ABC ranking on the basis of Sales contribution; – An ABC ranking on the basis of Cost of Goods Sold; – An ABC ranking on the basis of Inventory Value contribution.
  • Identification and presentation of the “fringe” or non contributing products… the last 1% from the ABC analysis, both from low sales value or profit contribution.
  • Regular identification of slow moving and obsolete products (for example, ‘slow’ moving is no sales in last 6 months and ‘obsolete’ is no sales in last 12 months) and present such products to Sales and Marketing Management for a decision over the product’s future.
  • Manage categories of products for special customers or for special forecasting…

As well as the flexibility of the Pareto ABC ranking, the filters and range selection criteria available within Demand Solutions™ provides extensive scope for product and category management. The selection by exception, ‘the ease of use’, the speed of operation suggest that Demand Solutions™ is well matched to the function of data management.

An interesting aspect of this responsibility is the potential benefit to the organisation from a proactive analysis and identification program. Tighter controls on the Product range, leads to range rationalization, most importantly a more profitable mix in the range, as by products everyone has less ‘data processing’ time, and IT has less data storage and data manipulation.

While the Demand Manager approach may not be a bad outcome, I believe the task should receive more focus and credibility within organisations, and it would be more effectively accomplished, particularly if the responsibility was to be explicitly defined rather than performed by default.

A formal acknowledgement that the scope of data management activities for the Product Range should be included as a responsibility of the Demand Manager will have an impact on the way the role is perceived within the company and receive more support from other functions and hence produce the desired results.

If would like to discuss the any of the Product Management strategies raised within article and their application to your business, contact one of our consultants for an appointment.

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