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Reduce Complexity

Portfolio AND PRODUCT Rationalization

Case Study 1

Client:

Global Industrial Leader

 

Situation:

Client, a global industrial leader with a history of innovation was looking to reduce portfolio complexity and improve profitability in the immediate term. WWG was engaged to lead key components of the Product Rationalization Plan including pre-identified high impact platforms and institutionalize best practices. Scope was across two global business units with $800M in revenue.

 

Action:

  • WWG evaluated the pre-identified product groups for consolidation (product groups marked as ‘old' by client), highlighted gaps in client’s hypothesis and revamped the complexity reduction program.

  • Rather than embark on random elimination of product skus, WWG conducted fact based research and customized WWG’s rationalization process and tool kit for client, a programmatic methodology that could be scaled globally.

  • For quick hits, the methodology focused on a Supply chain view / low frequency low volume products.

  • Established a change management program across functions.

  • Focused on all aspects of Portfolio including spare parts policies, new SKUs and derivatives.

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Result:

  • Put the pre-identified product groups’ elimination on hold as no commensurate savings and retained $13.5M in GM.

  • Institutionalized a phased rationalization program anchored by a best practices methodology as part of portfolio management with cross functional team.

  • Executed a 90 day fast track program across 3 global plants with 20K + skus as pilots, and eliminated 3000+ skus, while addressing several gaps in source data, and recovered $500k + back end savings.

  • Programmatic methodology and analysis led to ‘kill’ rate @ 54% with minimum disruption to ongoing business.

  • Also incorporated another company first – a fire sale program which was critical to managing excess inventory and in broader terms the working capital.

  • WWG recommended several next steps to further the cause of programmatic portfolio management, including a process for analyzing and identifying back end savings.

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Does your company need our rationalization services? Message us today.

Case Study 2

Client:

Fortune 1000 Industrial

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Situation:

Client, a multi-billion$ global manufacturing leader with a history of innovative products was streamlining portfolio yet was beset by product proliferation. Client was focused on treating the symptoms and not the causes.

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Action:

  • WWG diagnostic identified SKU proliferation with poor governance and protocols. Analysis identified 20K + skus with high frequency of adds and propensity of business units to adds SKUs at will for incremental revenue.

  • Championed cause of reducing SKU proliferation and drove improvements across the company.

  • Aligned global cross functional stakeholders, and gained buy-in.

  • Developed and implemented new process to control the addition of new derivative skus and Revamped stage gate process metrics to ensure pre-defined set of skus make up the business case of an NPD program - both initiatives contribute towards the long term control of ‘product proliferation’.

  • Established gates across functions to minimize proliferation.

  • Launched a global change management program to drive adoption of the new policies.

 

Result:

  • Immediate drop in new SKU requests and resultant management complexity across functions.

  • Team began to focus on the best product opportunities from existing portfolio - >10% uptick in $ profits from increased sales of existing high margin products.

  • Improved working capital by $100,000 in year 1 by consolidation of raw materials and specials.

  • Optimized portfolio mix over time and achieved improved COGS (~5%).

  • Captured a valuable databank of information for analysis for continuous optimization activities.

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Does your company need our rationalization services? Message us today.

Control Of Portfolio Proliferaton

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