Product life cycles impact supply chains

As companies rapidly develop newer and more advanced products, consumers are eager to get their hands on the latest goods. Many companies are more focused on showcasing the latest technology in their products, and it's not as common to see a company consistently market new gadgets rather than keeping their focus on products that can be sold over a long period of time. In fact, according to Supply Chain Digital, 50 percent of annual business revenues come from new consumer goods released within the last three years.

The problem with short product life cycles
Even though it may look good for companies to consistently have new products on the market and continually phase out older models, it can put a strain on multiple sections of a business. Not only does this put enormous pressure on corporations to come up with the latest gadget and release it before their competitors, it can also put a serious strain on a company's supply chain.

With so many new models and products flying through a supply chain, it can be hard to determine how many of which model can be made at one time, and where they need to be manufactured and shipped. Properly organizing a supply chain is key for corporations that are consistently developing new products and that rely on the latest technology in order to make their sales goals.

Developing strategies to manage supply chains
When a company relies on products with short life cycles, it typically needs to make adjustments to its supply chain in order to keep things running smoothly. An improperly managed supply chain can determine how well a product does with consumers, and hold-ups can be detrimental to sales.

It's critical to keep production moving at a quick pace. Companies that don't have reliable material suppliers may find themselves short on product in the early days of a release, and suffer high consumer demand and no inventory to sell. In some instances, it may be beneficial to rethink procurement best practices to make sure everything is provided on time. New products need to get on the market as quickly as possible, or they risk losing relevance to a competitor's on-time release. When a company has a long and complex supply chain based around the globe, it can be difficult to get goods from place to place in a timely fashion and be able to track down the shipment if something goes wrong.

Having a strong hold on sourcing, production and logistics is essential when a company relies on consumer goods with short life cycles. It's critical to know how efficiently materials and products are moving through the supply chain to help ensure a product launch is successful.