Application of PSM technology for planning and management of assortment in B2B and B2C companies

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MAGAZINE №6 (83) December 2017


CATEGORY  Analysis in logistics and SCM Inventory management Logistics service management Retail companies’ corporate logistics


Nowadays Russian trading companies have to carry out their product portfolio policies in conditions of   tough competition, presence of numerous goods vendors in the market and constant product portfolio renewal. These factors significantly complicate the process of sales forecasting.  On the other hand, increasing the accuracy of planning through assortment management at the operations level allows you to use additional features to increase profitability.  Several articles will describe practical application of the author»s concept entitled “Product Status Management” in contemporary B2B and B2C companies in order to improve the quality of planning. It took more than 15 years to gather information and formalize this concept in the course of practical work. Initially, the author worked on the issue of elaboration of mathematical forecasting methods by stock keeping units (SKUs). However, in practice he became convinced that the way of solving this problem largely lies in the sphere of administration, management of the product portfolio and the Roles involved in the process rather than in the plan of improving the mathematical methods of forecasting. The proposed «Product Status Management» concept is a logical development of «Product Life Cycle» theory (Theodore Levitt) as well as ECR, S&OP and CPFR concepts.   The concept of «Product status management» gives additional opportunities for profitability management and profit increase. It significantly simplifies the subsequent automatization of SCM processes.  This article will introduce you to the basic elements of this concept relevant to the planning process. 

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