How well aligned is your assortment with the overall strategy of the business? While a well-thought-out assortment can generate a huge profit, an ill-balanced assortment can negatively impact a company’s margin. Use this checklist to assess the effectiveness of your assortment and gain greater insight into the impact of product lifecycles of items within your range.
The majority of unsold inventories come as a direct result of the very first purchase order. Therefore, before introducing a new product, you should develop a clear process to ensure that items are phased in and out effectively. Furthermore, given that each phase of the product life cycle requires a different approach, the inventory must be managed accordingly. For example, a new product that is ready to be introduced will have very different demand characteristics to a product that is in the final phase of the PLC.
Who determines the inventory strategy for each product? In many companies, this is not clear. By aligning the assortment to the business strategy, companies can massively reduce inventory costs and while simultaneously increasing profitability. With this in mind, is assortment in line with your strategy?
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