SKU Rationalization: Pruning Your Way to Better Performance

Uncontrolled product proliferation can play havoc with a company by adversely affecting revenue, profit, and service level. In this article, the author argues that effective management of the product portfolio requires periodic pruning of extremely low volume products. He discusses which products are to be pruned and why, and also provides considerations for which products should not be pruned. Extremely low volume products are difficult to forecast and manage effectively, and pruning can eliminate this problem.