26th International Association for Management of Technology Conference - IAMOT 2017

Nowadays, companies face rapidly increasing numbers of product variants. Among new developments or facelifts the current product portfolio is rarely revised. In addition, there is often no continuous reduction of the part master. Over time this leads to an excessive product portfolio and a disproportionate increase in complexity costs, because old products often require intensive support. Resources are tied and not available for innovation. According to KERSTEN, 27% of all product variants and 37% of all component variants are superfluous – the consolidation of product portfolios is hence inevitable [1]. To obtain an optimal distribution of resources and maximize innovation strength, the consolidation must include the elimination of unprofitable and fostering of promising products. This requires a systematic anticipation of future developments. Especially companies confronted with disruptive changes such as digitalization, have to reconsider their product portfolio. Due to the strong networking of products an isolated consideration of individual products is not effective. It threatens negative impacts on profitable products. Especially in historically grown product portfolios dependencies are not obvious. Companies face the question: How can we reconfigure our portfolio in the light of digitalization under the condition maximal turnover increase and cost savings? In this paper, we present a methodology for the future-oriented consolidation of product portfolios simplifying analysis and digital transformation of product portfolios. Starting point of the methodology is the aggregation of information. This comprises a characterization of the current product portfolio, the identification of possible product gaps and the grouping of similar products to a manageable number of product groups. For them an automated cross-linking-analysis from a market and a technical perspective is conducted. The cross-linking analysis allows the quantification of the leverage of individual products. The third step is a systematic anticipation of the future relevance and uniqueness of product groups. Among other things, this enables the verification product gaps. In light of the impact of digitalization and the cross-linking of product groups critical product groups are determined. For them fadeout and ramp-up measures are determined. The result is a future-oriented consolidation-roadmap, which allows for the elimination of unprofitable products in favor of promising innovations. The main result of our research is a methodology that enables a systematic digital transformation of product portfolios. Apart from that, we achieved several sub-outcomes: (1) By coordination of product development and product elimination an ideal allocation of resources is reached. (2) The impact of digital technologies on the product portfolio varies and must be anticipated systematically. (3) Success factors for consolidation are usage of reliable, relevant data and decoupling of the elimination decision from the product lifecycle. The introduced methodology provides tangible benefits for companies when it comes to the digital transformation of their product portfolio: (1) it supports the efficient analysis of relevant data, (2) enables the quantification of the leverage of individual products, (3) ensures an early identification and evaluation of future success potentials for product gaps in the light of digitalization, and (4) it reduces planning complexity and quickly leads to a sustainable product portfolio. Literature: [1] Kersten, W (2002): Vielfaltsmanagement. TCW Transfer-Centrum, München