Thanks everyone who participated in this webcast from The Association of International Product Marketing and Management (AIPMM). J.F. Ouellette shares insights on end-of-life (EOL) processes to reduce the accumulation of obsolete products. This topic has traditionally not taken up a lot of bandwidth in discussions. It is however a source of reduced working capital and improved operations. Organizations look to product management to drive product rationalization as a way to increase business efficiency. About the Speaker: J.F. Ouellette is the founder and President of QUAD. He has worked over 25 years in various functions within industry. His roles encompassed strategic and tactical business development, NPD, needs analysis, product management and marketing with manufacturers Ansell; Kappler; E.I. DuPont; North Safety and finally Honeywell International. His expertise is called upon globally. He holds a degree in Commerce from Concordia University and is an alumnus of the McGill University Executive Institute, both in Montréal. He is a Certified Product Manager (CPM) and SixSigma green belt. Upcoming Events For more information regarding certification courses near you, contact Hector Del Castillo at http://linkd.in/hdelcastillo. About AIPMM The AIPMM is the hub of all things product management. It is where product professionals go for answers. With members in over 65 countries, it is the worldwide certifying body of product team professionals. It is the world's largest professional organization of product managers, brand managers, product marketing managers and other product team professionals who are responsible for guiding their organizations, or clients, through a constantly changing business landscape. AIPMM's certification programs are internationally recognized because they allow product professionals to demonstrate their expertise and provide corporate members an assurance that their product management and marketing teams are operating at a high competency level. Visit www.aipmm.com. Upcoming Webinars: http://aipmm.com/aipmm_webinars/ Subscribe: http://www.aipmm.com/subscribe LinkedIn: http://www.linkedin.com/company/aipmm Membership: http://www.aipmm.com/join.php Certification: http://aipmm.com/html/certification Articles: http://www.aipmm.com/html/newsletter/article.ph

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J.F. Ouellette: @QUADmarketing
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Today’s Speaker
Moderator:
Hector Del Castillo, CPM, CPMM
Product Innovation Consultant
Speaker:
J.F. Ouellette, CPM
President & Founder
QUAD Product Optimization, Inc.
jfouellette@quadmarketing.co
www.quadmarketing.co

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FEATURED PRESENTATION

7. QUAD
PRODUCT LINE STRATEGY AND OPTIMIZATION CONSULTANT
P.A.O.
Identify and manage products at EOL
(c) 2013 QUAD – Montréal, Canada - Proprietary 8

8. (c) 2013 QUAD – Montréal, Canada - Proprietary9

9. Why do we optimize product lines?10
(c) 2013 QUAD – Montréal, Canada - Proprietary
Planned abandonment means rejecting the continued
use of tactics, strategies, or techniques that brought
your company success in the past and, instead,
continually establishing new means by which your
company can attain success since, as is often the
case, these "tried and true" methods of success are
no longer useful

10. Reality check
 Who is opposed to removing
obsolete products?
 Is elimination loosing products a
positive thing?
 Should our sales force sell
declining products?
 Who handles EOL in our
organization?
 Do we take orders for
discontinued products?
 Who is against product
rationalization?
 How much of a career builder is
this?
11
(c) 2013 QUAD – Montréal, Canada - Proprietary
« Today we’ll look at rationalizing our
product line. Any ideas on how to proceed? »

11. P.M. focus by industry
New products
Mature
Declining & EOL
New products
Mature
Declining & EOL
12
(c) 2013 QUAD – Montréal, Canada - Proprietary
High-tech industry Traditional industry

12. How P.M. impacts the organization
(c) 2013 QUAD – Montréal, Canada - Proprietary
13
The optimal
number of SKUs
is based on the;
 Business
plan
 Customer
needs
 Company
ability to
supply
 Contribution
from each
SKU

13. Indications of a problem
 Product proliferation
 Don’t know which ones are
financially and strategically
contributing…
 … which can provide more
and…
 …which are a drain on your
business
 You want to reduce your
inventories but maintain
customer service
 You need cash to invest in other
areas
 Old inventory in the warehouse
 Using an average costing
method
-500
0
500
1000
1500
2000
2500
3000
Product A Product B Product C Product D
Product performance $
Sales $ Gross Margin $ Operating income $
14
(c) 2013 QUAD – Montréal, Canada - Proprietary

14. The hidden costs of a SKU
 Inventory warehousing
 Yearly cost of $1 inventory?
 S.G. & A.
 Manufacturing Set-up
 Logistics
 Customer service
COGS
61%
Selling
15%
Marketing
5%
Warehousing
and handling
5%
Administrative
5%
Operating
income
9%
SKU Cost elements
15
(c) 2013 QUAD – Montréal, Canada - Proprietary

15. The cost of not acting
16
(c) 2013 QUAD – Montréal, Canada - Proprietary
Today’s operating income
16
Operating income per SKU
The future
Operating income per SKU

16. The optimized product line
17
(c) 2013 QUAD – Montréal, Canada - Proprietary
 Simplified product offering
 Reduced operational costs
 Removed non performing
SKUs
 Improved product positioning
 Increased cash flow
 Reduced cost of sales
 Increased prices

17. Levels of analysis
(c) 2013 QUAD – Montréal, Canada - Proprietary
18
 Financial
 Sales
 Margins
 ROI
 Strategic
 Fit
 Product positioning
 Product phase
 Operational
 Cost to serve
 Inventory turns
 Set-up cost
 Ease of replacement
Quality of analysis
Financial data
Strategic data
Operational
data

18. The Four Step Process
(c) 2013 QUAD – Montréal, Canada - Proprietary
19
• Conserve
• Improve
• Remove
• Market side
• Supply side
• Financial
analysis
• Strategic fit
• Risk / rewards
• Sales data
• Strategic data
• Operations data
Step 1
Gather
appropriate
data
Step 2
PAO BI tool
Step 3
Determine
action plan
Step 4
Execution
1 2
34

19. From subjectivity to usable data
(c) 2013 QUAD – Montréal, Canada - Proprietary
20
Decision ProductName
Product
number
Inventory value on
hand US$
Units on hand Sales US$ Margins US$
Main supplier
name
Remove AA A 500 20 1000 200
Remove BB B 1500 100 10000 4000
Improve CC C 600 50 2000 200
Conserve DD D 3700 750 5000 1750
Remove HH H 28000 2500 75000 32250
Improve FF I 500 200 5000 3100
Conserve JJ J 2000 80 7500 2025
Remove KK K 200 10 500 70
Improve EE E 750 300 6700 2211
Improve FF F 1000 100 2600 624
Remove GG G 1200 15 24000 5040
Products Financials Strategic Operations
A 0 % 0 % 0 %
B 86 % 30 % 30 %
C 11 % 60 % 60 %
D 76 % 100 % 100 %
E 86 % 27 % 33 %
F 30 % 56 % 51 %
G 55 % 54 % 72 %
H 100 % 41 % 18 %
I 76 % 49 % 63 %
J 60 % 47 % 67 %
K 0 % 56 % 42 %

20. Organizational Challenges
 Products are like best friends
and family pets
 Sales usually wants to have all
the products available
 Trade offs: Top line vs bottom
line impact
 Designed to be sustainable
 The process reduces emotional
decisions
 Customers need to be kept
informed
 All departments are involved
 Top management has to support
the process
21
(c) 2013 QUAD – Montréal, Canada - Proprietary

21. Speaker Bio
J.F. Ouellette, CPM
President & Founder
QUAD Product Optimization, Inc.
• Over 25 years in various functions within industry.
• Roles encompassed strategic and tactical business
development, NPD, needs analysis, product
management and marketing with manufacturers
Ansell; Kappler; E.I. DuPont; North Safety, and
Honeywell International.
• Holds a degree in Commerce from Concordia
University and is an alumnus of the McGill
University Executive Institute, both in Montréal.
• Certified Product Manager (CPM) and SixSigma
green belt.

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Q & A
Moderator:
Hector Del Castillo, CPM, CPMM
Product Innovation Consultant
Speaker:
J.F. Ouellette, CPM
President & Founder
QUAD Product Optimization, Inc.
jfouellette@quadmarketing.co
www.quadmarketing.co

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Upcoming Courses
Course & Location Dates Days Time
ACPM® Certification Prep Course & Exam
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McLean, VA
Aug 26, 2013
Sep 16, 2013
M 8:30 am – 5 pm
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Contact Melissa Holtzer, melissa@280group.com, for more information.
Additional certification prep courses are available in Austin, San Jose, and London.

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For More Information About
• AIPMM membership benefits
• Certification courses near you
• How to prepare to take a certification exam
Hector Del Castillo, CPM, CPMM
Senior Product Innovation Consultant
hmdelcastillo@aipmm.com
linkd.in/hdelcastillo

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