product generation a.k.a. product management

Product Generationa.k.a. Product Management

Ken Homa

Product Generation

New Product Development

Product / Process Linkage

Product Line Management

Branding Strategy

Product Life Cycle

• Typical pattern, highly varied…by product, geography

• Cash flow critical…Mature ‘lend’, growth ‘borrow’

• Manage the PLC…Differentiated tactics…Revitalization

““Owning a customers’ lifetime profitability Owning a customers’ lifetime profitability requires a full line that keeps competitors out. requires a full line that keeps competitors out. The incremental costs of line extensions are The incremental costs of line extensions are low & computers handle the complexity.” low & computers handle the complexity.”

Product Line MangementThe Issue

“Owning a customers’ lifetime profitability requires a full line that keeps competitors out. The incremental costs of line extensions are low & computers handle the complexity.”

““Pareto lives. Stay focused and simplify. Pick your Pareto lives. Stay focused and simplify. Pick your winning products and customers, bet big on them, winning products and customers, bet big on them, and be willing to walk away from some business.”and be willing to walk away from some business.”

Product Line MangementThe Issue

A broad product line is required to fully A broad product line is required to fully cover all (or most) customer / market cover all (or most) customer / market requirementsrequirements

...and to erect barriers from competition...and to erect barriers from competition.

Product Line ManagementThe Issue

A broad product line is required to fully cover all (or most) customer / market requirements

...and to erect barriers from competition.

But, complexity & costs increaseBut, complexity & costs increaseexponentially as product lines get longexponentially as product lines get long

Product Line ManagementThe Issue

Product Line Proliferation

• Size, color, pack

• Special & derivative models

• Accessories

• Ancillary products

• Multiple generations

Combinations & permutations ...

Power Tools

The evolution of a product line ...

DRILLS SAWS OTHER

Power Tools

DRILLS SAWS OTHER

PROFESSIONAL

CONSUMER

Power Tools

DRILLS SAWS OTHER

PROFESSIONAL

CONSUMERGOOD

BETTER

BEST

Power Tools

DRILLS SAWS OTHER

CO

RD

LES

S (

DC

)

CO

RD

LES

S (

DC

)

CO

RD

ED

(A

C)

CO

RD

ED

(A

C)

GOOD

BETTER

BESTPROFESSIONAL

CONSUMER

Power Tools

FEATURES

SIZES

COLORS

PACKS

Variable speedVariable speed

1/4”, 3/8”. 1/2” drills1/4”, 3/8”. 1/2” drills

Pro black DeWalt yellowPro black DeWalt yellow

Redistribution, KitsRedistribution, Kits

Power Tools

Strategic Models

Supplementary Brands

Complementary Products

Accessories

Global / Regional Models

Flagships, fighters, derivatives

Sub-brands, private label

Cordless tools, chargers

Drill bits, saw blades

110/240 V

Generational Recycling ...

Product Line ManagementBreadth & Depth of Line

Key : product line / item profitabilityKey : product line / item profitability

…Imprecise, but enlightening

Product Line ManagementBreadth & Depth of Line

Key : product line / item profitability

Each Each andand every every item has associated item has associated costs : some visible, some hiddencosts : some visible, some hidden

…Cannibalization…Inventory…Administration…Repair parts

Product Line ManagementBreadth & Depth of Line

Key : product line / item profitability

Each and every item has associated costs : some visible, some hidden

ParetoPareto isis alive, wellalive, well ... and... and applicableapplicable

… Rule of 80 / 20

Product line managementKeys to Success

Strive for shortest lineStrive for shortest line Treat incremental items as major decisions

Product line managementKeys to Success

Strive for shortest line

Watch for “line creep”Watch for “line creep”

Especially when new generations launched

Product line managementKeys to Success

Strive for shortest line

Watch for “line creep”

Prune aggressivelyPrune aggressively

Tie pay to line profitability

Product line managementKeys to Success

Strive for shortest line

Watch for “line creep”

Prune aggressively

Link product & process designLink product & process designMass customization

Design Elements

Technical EfficacyInnovation

Functionality

Ergonomics

Aesthetics

Manufacturability

Design Elements

Technical EfficacyInnovation

Functionality

Ergonomics

Aesthetics

Manufacturability

Product / Process LinkageMass Customization

Common componentsCommon componentsStandardized parts

ModularModular platformsplatforms“Virtual inventory”

PostponementPostponementEnd of line customization

More RIP ... less FG ... faster cycles