The average manufacturing company has thousands of items in their product portfolio. The 80/20 rule dictates that of these, around 20% of products likely account for roughly 80% of a firm’s revenue. The remaining 80% of products form a long tail that together adds up to roughly 20% of sales. With so many products in play, it can be quite challenging to individually manage and care for each of the thousands of items in a portfolio. Product portfolio management is the key to doing so. Most companies use product rationalization — [...]

Until recently, manufacturing companies could get away with a certain level of complacency in terms of their product portfolios. They could sell the same products for years and years without changing a thing. With fewer overall options, buyers tended to be steadfastly loyal once they found the brands they liked. Today, though, product innovation is much higher. Buyers have a plethora of information and options at their fingertips, and they are much less likely to be brand loyalists. When it’s time to buy a new wrench, they’re liable to research different [...]