In the last few decades, retail giants like Walmart and Amazon have turned right-time delivery into the most significant supply chain virtue. But demand has recently revealed weaknesses in this system. If a single link in the right-time delivery chain breaks down, the consequences reverberate along its whole length. If steel isn’t delivered because of an iron ore shortage, for instance, more than a dozen industries relying on right-time delivery will come to a sudden standstill.
What can product managers (PMs) do to help strengthen the links of their product supply chain?
Pare down and stock up
First, review supply chain redundancies and recommend steps for insulating your company and product line against logistics disruptions. Spend time working with your supply chain groups and advise them on strategies for leveraging supplier relationships to proactively build inventory and guard against broken links in the supply chain. Keeping extra supply in stock, when and if your organization can manage it, means you can keep distributing product. With raw materials, essential parts, and other critical ingredients on hand, your company can maintain production even with supply chain disruptions.
Check the data
Unless you’re launching a brand-new product, you have access to historical data. Use it to forecast market needs before they become urgent. Set order projections months, rather than days or weeks, in advance. Right-time delivery translates to no delivery at all when the supply chain is severely disrupted. Suggest that manufacturing managers make regular orders from multiple suppliers, so when the worst happens, your company ranks among their most valued customers.
Meet your customers
If you haven’t already, get to know your customers now. Shutdowns began in March of 2020. People spent months inside and learned to bake bread to pass the time. These are not the same customers you had in February of 2020
With all the earth-shaking events of the past two years, values have changed. Do the research and analyze the data to figure out precisely what has changed. Are different people using your product? Are existing customers using it in new ways? How does your product benefit your customers’ altered lifestyle? Which customers came to your product because circumstances and values have changed? When you have answers for these questions, you can identify opportunities to grow your product’s market share.
Suggest strategic cuts
Your company might be dealing with reduced revenue, and everyone is concerned with — and actively measuring — productivity, with a keen eye peeled for potential cost savings. Stay ahead with strategic planning. Create visual reports to illustrate the importance of intentional decision-making when reprioritizing spending and proposing cuts — and encourage the use of a scalpel rather than an axe.
Account for essential expenses that maintain or increase your product’s market share. With the competition in survival mode, you have an opportunity to grow your customer base. Propose options for adjusting your marketing approach, and recommend strategies for making it practical, simple, and straightforward. Keep market research high on your priority list, so you can monitor market response and measure customer satisfaction. Predictable, reliable distribution also plays a critical role in building and maintaining an ideal customer experience.
Begin by cutting expenses with the lowest impact on market share. Propose repositioning advertising to reflect the changing environment. Engage production teams to audit manufacturing and packaging expenses, and reexamine product goals and expectations to align with the new reality on the ground.
Make a plan
Develop comprehensive, data-driven recommendations for cost savings and supply chain management. Take the nuances of changing customer behavior and product use in the context of supply chain realities to drive the best decisions about where to cut. Measure twice, make a plan, and suggest cuts where you can.
The world is not the same as it was two years ago. Assessing the new reality, and strategically planning for it, will position you to build product and brand success in a permanently altered market.
To learn more about cost management and supply chain strategies for product managers — and the importance of professional certification for product and brand managers — visit aipmm.com.