Product Portfolio Management Research Articles

Product-level profitability analysis and decision-making: opportunities of IT application-based approach

Product portfolio management (PPM) is vital for companies to succeed. It aims to constitute a profitable entity for company products in the long-term. The extant literature on PPM is, however, lacking in IT application-based discussion, which links to the potential of IT system independent analysis and reporting. One potential application is producing accurate product-level profitability calculations. This study aims to conceptualise application-based PPM analysis and identify the related data needs. Additionally, the opportunities and risks related to the implementation of the concept are studied. The study combines a literature review with qualitative company analyses. The results aid in understanding application-based PPM analysis and clarify the related opportunities for its use. Our research appears to indicate that application-based PPM analysis has the potential to improve product portfolio-related decision-making while reducing the manual work needed for profitability reporting.

Product-level profitability analysis and decision-making: opportunities of IT application-based approach

Product portfolio management (PPM) is vital for companies to succeed. It aims to constitute a profitable entity for company products in the long-term. The extant literature on PPM is, however, lacking in IT application-based discussion, which links to the potential of IT system independent analysis and reporting. One potential application is producing accurate product-level profitability calculations. This study aims to conceptualise application-based PPM analysis and identify the related data needs. Additionally, the opportunities and risks related to the implementation of the concept are studied. The study combines a literature review with qualitative company analyses. The results aid in understanding application-based PPM analysis and clarify the related opportunities for its use. Our research appears to indicate that application-based PPM analysis has the potential to improve product portfolio-related decision-making while reducing the manual work needed for profitability reporting.

Integrating Sustainability Considerations into Product Variety and Portfolio Management

Customers today desire more individualized products and services. As a consequence, the market must deal with a significant increase in a variety of offerings to satisfy this changing customer demands. This rapidly increasing variety affects operations complexity of manufacturers and subsequently costs and environmental impact. Consequently, companies need to better understand and find innovative ways to unleash a variety of benefits as well as driving down costs and environmental impacts. This paper reports on a research conducted within the Thomas Jefferson project SUSTAIN aiming to innovatively integrate environmental sustainability in practitioners’ decisions, on a win-win basis. More specifically, a general framework is shaped in a view to support the integration of sustainability considerations into the management of product variety and portfolio. The framework development relies on variety and portfolio management, and product configurators. Relevant background literature has been analyzed and the framework is described and discussed.

Data-driven Begins with DATA; Potential of Data Assets

ABSTRACT The objective of this study is to analyze the potential of company data assets for data-driven, fact-based decision-making in product portfolio management (PPM). Data assets are categorized from the PPM standpoint, including (product/customer/ …) master data, transactional data, and interaction data (e.g., IoT data). The study combines literature review and qualitative analysis of eight international companies. The findings underline the crucial role of corporate-widely combined and governed data model. Company business IT is adjusted against the corporate-level data model. The order of importance is data first, and the technology second. The data-driven mind-set and culture creation are also important. The implications include understanding the role and potential of combined data assets that form the basis for data-driven PPM. Facts based on company data assets are essential for decision-making instead of “gut feeling” and emotions. The utilization of the unused potential of data assets is promoted in the transformation toward data-driven PPM.

Minding the gap

Despite strategic design (SD) and product portfolio management (PPM) play a pivotal role in driving companies toward a more sustainable economy, it is still not clear how SD and PPM can contribute to the advances of circular business models (CBM). In this context, the aim of this research was to analyse the main literature about SD, PPM and CBM proposing an integrative framework, as well as to reduce the gap on drivers and barriers in the development of CBM through a case study in a biodiversity company. As conclusions of this work, SD helps companies to define the strategic vision for innovation, integrating sustainable stakeholder objectives, meanwhile, PPM activities support the decision-making process, being responsible for the alignment of projects with firms’ strategy when generating circular business. In addition, regulatory requirements and cost of production have shown the main drivers, whereas technological restriction is the main barrier to overcome.

Product-level profitability

PurposeThe purpose of this paper is to analyse current challenges and to articulate the preconditions for data-driven, fact-based product portfolio management (PPM) based on commercial and technical product structures, critical business processes, corporate business IT and company data assets. Here, data assets were classified from a PPM perspective in terms of (product/customer/supplier) master data, transaction data and Internet of Things data. The study also addresses the supporting role of corporate-level data governance.Design/methodology/approachThe study combines a literature review and qualitative analysis of empirical data collected from eight international companies of varying size.FindingsCompanies’ current inability to analyse products effectively based on existing data is surprising. The present findings identify a number of preconditions for data-driven, fact-based PPM, including mutual understanding of company products (to establish a consistent commercial and technical product structure), product classification as strategic, supportive or non-strategic (to link commercial and technical product structures with product strategy) and a holistic, corporate-level data model for adjusting the company’s business IT (to support product portfolio visualisation).Practical implicationsThe findings provide a logical and empirical basis for fact-based, product-level analysis of product profitability and analysis of the product portfolio over the product life cycle, supporting a data-driven approach to the optimisation of commercial and technical product structure, business IT systems and company product strategy. As a virtual representation of reality, the company data model facilitates product visualisation. The findings are of great practical value, as they demonstrate the significance of corporate-level data assets, data governance and business-critical data for managing a company’s products and portfolio.Originality/valueThe study contributes to the existing literature by specifying the preconditions for data-driven, fact-based PPM as a basis for product-level analysis and decision making, emphasising the role of company data assets and clarifying the links between business processes, information systems and data assets for PPM.

Impact of critical chain project management and product portfolio management on new product development performance

PurposeThis study aims to analyze the relationship between the adherence to critical chain project management (CCPM) practices and the new product development performance, in terms of the results of product development programs and product portfolio management (PPM).Design/methodology/approachA survey was conducted with 79 innovative companies operating in Brazil. Data were analyzed using correlation analysis and non-parametric tests.FindingsSignificant and positive correlations were found between CCPM adoption and the performance factors proposed. The adoption of CCPM offered stronger correlation with PPM performance than with the adoption of traditional methods. The results further indicate a possible indirect contribution of CCPM practices to the product development program by means of PPM improvement.Originality/valueThis study deepens the knowledge of the joint study between project management and new product development, by bringing empirical evidence that the adoption of specific practices suggested by CCPM is used by organizations with superior performance. Moreover, the results broaden CCPM literature by attesting that companies do not necessarily have to apply the CCPM approach in a formal and explicit way to obtain the performance results given. The analyses still have practical value when indicating which CCPM practices should be prioritized by managers seeking high performance in PPM.

At the Nexus of Blockchain Technology, the Circular Economy, and Product Deletion

The circular economy (CE) is an emergent concept to rethink and redesign how our economy works. The concept recognizes effective and efficient economic functioning at multiple scales—governments and individuals, globally and locally; for businesses, large and small. CE represents a systemic shift that builds long-term resilience at multiple levels (macro, meso and micro); generating new business and economic opportunities while providing environmental and societal benefits. Blockchain, an emergent and critical technology, is introduced to the circular economy environment as a potential enabler for many circular economic principles. Blockchain technology supported information systems can improve circular economy performance at multiple levels. Product deletion, a neglected but critical effort in product management and product portfolio management, is utilized as an illustrative business scenario as to blockchain’s application in a circular economy research context. Product deletion, unlike product proliferation, has received minimal attention from both academics and practitioners. Product deletion decisions need to be evaluated and analyzed in the circular economy context. CE helps address risk aversion issues in product deletions such as inventory, waste and information management. This paper is the first to conceptualize the relationships amongst blockchain technology, product deletion and the circular economy. Many nuances of relationships are introduced in this study. Future evaluation and critical reflections are also presented with a need for a rigorous and robust research agenda to evaluate the multiple and complex relationships and interplay amongst technology, policy, commerce and the natural environment.

A Regret Minimization Approach in Product Portfolio Management with respect to Customers’ Price-sensitivity

In an uncertain and competitive environment, product portfolio management (PPM) becomes more challenging for manufacturers to decide what to make and establish the most beneficial product portfolio. In this paper, a novel approach in PPM is proposed in which the environment uncertainty, competitors’ behavior and customer’s satisfaction are simultaneously considered as the most important criteria in achieving a successful business plan. In terms of uncertainty, the competitors’ product portfolios are assumed as different scenarios with discrete occurrence probabilities. In order to consider various customer preferences, three different market segments are assumed in which the sensitivity of customers towards the products price are considered as high, medium and low and modeled by means of a modified utility functions. The best product portfolio with minimum risk of loss and maximum customer satisfaction is then established by means of a novel regret minimization index. The proposed index aims at finding the best product portfolio which minimizes the total possible loss and regret of the manufacturer, with respect to the other competitors of the market. To better illustrate the practicality of the approach, a numerical example is presented. The results show that the selected products in the suggested portfolio have the highest utility value in all market segments and also they are expected to achieve the highest expected payoff in each possible marketing scenario.

Product and supply chain related data, processes and information systems for product portfolio management

Traditional product data management (PDM) systems have evolved to support the product lifecycle management (PLM). The combination, also referred to as PDM/PLM has developed into a product master data (PMD) repository. The PMD and business process related data are utilised in product portfolio management (PPM). However, companies' tendency to have productrelated data in silos among multiple business processes and information systems (IS) results in uncertain information for PPM. This study focuses on data, processes and information systems related to PMD and supply chain product data (SCPD), PPM and supply chain (SC) processes and information systems. The study highlights the related challenges in providing fact-based data for PPM analysis and decision-making. The results indicate that the key PMD and SCPD have not been connected back to PPM as automated and integrated data flow from enterprise resource planning (ERP) system to the PDM/PLM system. The key SCPD consists of product-related volume and cost information that should be linked to PPM analysis and decision making. These findings are critical to further develop data, processes and IS to support strategic and financial PPM analysis and decision making on what products a company should have in the portfolio.

Product and supply chain related data, processes and information systems for product portfolio management

Traditional product data management (PDM) systems have evolved to support the product lifecycle management (PLM). The combination, also referred to as PDM/PLM has developed into a product master data (PMD) repository. The PMD and business process related data are utilised in product portfolio management (PPM). However, companies' tendency to have productrelated data in silos among multiple business processes and information systems (IS) results in uncertain information for PPM. This study focuses on data, processes and information systems related to PMD and supply chain product data (SCPD), PPM and supply chain (SC) processes and information systems. The study highlights the related challenges in providing fact-based data for PPM analysis and decision-making. The results indicate that the key PMD and SCPD have not been connected back to PPM as automated and integrated data flow from enterprise resource planning (ERP) system to the PDM/PLM system. The key SCPD consists of product-related volume and cost information that should be linked to PPM analysis and decision making. These findings are critical to further develop data, processes and IS to support strategic and financial PPM analysis and decision making on what products a company should have in the portfolio.

Big data for big pharma

PurposeBig pharma, which comprise the most important companies in the pharmaceutical sector, are ambidextrous organizations by nature. Big data can heavily influence this characteristic by simultaneously requiring adequate business process management. In fact, the impact of big data on business process management can assist big pharma in increasing process efficiency (which is related to the research and development pipeline) and process efficacy (related to product portfolio management). The purpose of this paper is to investigate this possibility and opportunity.Design/methodology/approachIn the absence of specific scientific studies, as indicated by a review of the existing literature, the authors have adopted a grounded theory approach. This research has observed multiple cases (the 15 most important big pharma companies worldwide) through an electronic survey conducted on secondary data. The study has allowed the generation of a theoretical framework based on the (direct) relationship between knowledge process standardization (as the dependent variable) and big data (as the independent variable) in organizations oriented toward ambidexterity, such as big pharma in the specific scope of this research.FindingsAs big data utilization becomes widespread along the pipeline (or even along the value chain/supply chain), business process management increasingly uses (or tends to use) standardization, adopting process standardization as the main coordination mechanism to manage big knowledge. This theory is even more true when considering the moderating role of ambidexterity. An enterprise oriented toward structural ambidexterity (such as big pharma) that uses big data will require increased process standardization to manage big knowledge. Alternatively, an enterprise oriented toward contextual ambidexterity that uses big data will require increased output standardization.Originality/valueBased on an analytical literature review, no research to date has focused strict attention on the influence that big data can have on business process management to improve the natural ambidexterity of big pharma. The main unique feature of this research relies on this point. The main value of the research originates from the theoretical framework reconstructed by grounded theory, which constitutes a powerful strategic tool to support executives and managers of big pharma in organizing business process management for their ambidextrous organizations using big data.

Framework proposal for ecodesign integration on product portfolio management

Abstract Although many studies on product portfolio management (PPM) and ecodesign exist, there are few investigations that analyze these areas in an integrated way. They are normally conceptually separated, with very few theoretical and empirical interactions evident in the literature. This article proposes a theoretical framework that integrates ecodesign practices, methods, and tools with portfolio management during the product planning stage. For the development of this framework, a systematic analysis and literature review of both PPM and ecodesign were conducted. The framework subsequently developed was evaluated through a pilot test within two companies that develop products derived from Brazilian biodiversity. In terms of results, it presents a set of practices that are associated with the following dimensions: Guides, Methods, and Tools; Organization; and Strategy. After presenting the evaluation of the framework by the companies, practices are proposed which can be useful for the integration of ecodesign into PPM, such as adoption of the Project Management Office (PMO) and the use of social media.

Managing product variety: a case study on an industrial company

This article describes the development of a framework that supports the decision-making process associated with product portfolio management. By implementing this framework, product managers are better able to make decisions about which products to include or remove from their portfolio. This framework was developed through an action research project in collaboration with a company where the number of references has grown steeply in recent years. A detailed analysis of the current portfolio was conducted, leading to recommendation to remove / discontinue from the product portfolio 21.5% of the references of the family of products that was selected for analysis. An additional process flow was suggested to prevent the inclusion of unnecessary products in the portfolio.

Identifying Multi-Efficient Portfolios

The efficient frontier approach to financial portfolio management is widely accepted to make tradeoffs between risk and reward, where reward is generally the returns from the portfolio and risk is the dispersion of those returns. But when other variables such as dividends, earnings surprise, net margins, etc., are the considered measures of reward, alternate portfolios may likely be efficient. It would be useful in such cases to see if there are certain portfolios that are efficient with respect to multiple variables and to evaluate the losses from using a portfolio that is efficient with respect to one variable but not another. In this paper we introduce the concept of multi-efficient portfolios and present an algorithm to identify them. This work was motivated by the acquisition process in the credit card industry where multiple variables such as net cash flows, risk of delinquency, chance of customer attrition, etc., are important in analyzing and soliciting applications from prospective customers. This multi-efficient portfolio approach has potential use in a wide array of applications where success is determined by performance on multiple variables, such as seed acreage (yield, quality), vendor selection (price, quality, flexibility), workforce planning (transactional versus experiential, simple versus complex, research ability versus teaching ability in universities), product portfolio management (sales, margins, growth, market share). Numerical examples, structural results and numerical analyses are presented to better understand the model and the import of the approach.

Green Product Development and Product Portfolio Management: Empirical Evidence from an Emerging Economy

AbstractFew studies have explored the relationship between green products development (GPD) and product portfolio management (PPM). When considering evidence from emerging economies, the knowledge gap is even deeper. Consequently, the objective of this work is to analyze how green and traditional practices of new product development (NPD) influence product portfolio and NPD performance. In addition, we explore how GPD opens new markets and technology opportunities. The empirical evidence is based on a sample of firms that are developing products and belong to innovative industrial sectors in Brazil. In general, the framework developed and tested in this research indicates the following: (i) the adoption of GPD practices significantly influences product portfolio performance; (ii) the adoption of GPD practices tends to generate positive results with regard to obtaining technological and market opportunities; (iii) the adoption of traditional PPM practices influences the dependent factors. Unexpectedly, correlations between a firm's size or age and its performance were not confirmed. This is the first empirical evidence relating GPD, PPM, and market and technology opportunities in Brazil. Copyright © 2017 John Wiley & Sons, Ltd and ERP Environment

Continuous Cost Reduction Resilience in Adaptive Responsive Supply Chain

Fashionable products industries are facing greater pressures from market saturation with shorter interval of new add-ons product introductions make easy by open-technology platform proliferation. Consequently responsive supply chain needs to be more adaptive and agile in sustaining continuous cost reduction to be resilience. The study looks at the repercussions of rapid product and technology mutations; higher market volatilities, and the criticality of appropriate systems and methodologies in deliver continuous cost reduction resilience and sustainability. The focus is on fundamental nature of continuous cost reduction (CCR) system and processes; its centrality in adaptive responsive supply chain (A-RSC) amidst market uncertainty which persists to be more vulnerable. In A-RSC with soaring dynamics, it is imperative to fully grasp the structural comprehensiveness, responsiveness and agility to avoid structural incoherency and non consistency. Specifically, the study takes CCR architecture as a whole with its key functional components – core strategic vision, cost management, product portfolio Management, product design and development and product lifecycle management in skilful materializing sustainable CCR. Main objectives of this study are to find the answers to: is CCR process mainly a result of deliberate, carefully planned and managed deterministic competitive strategy in adaptive responsive supply chain? Or it is just evolves through an incremental experiential process going through a sequent of stages towards more resilient and reliable cost reduction? Or cost reduction is just another utility in A-RSC with little strategic value?

Product Portfolio Management with Production Flexibility in Agribusiness

The acquisition of production flexibility is a well-documented strategy pursued by many firms to counteract certain operational constraints. However, these flexibilities can increase the complexity of a production system and the difficulties in managing increased complexity may hinder exploiting the full benefit of flexibility. In this paper, we consider one such flexibility paradox at an agribusiness firm for an annual $800 million production decision: The firm produces a number of products (hybrid seeds) using limited inventories of several raw materials (parent seeds) and a production process that is subject to random variations. To handle the raw material availability constraint and to partially mitigate the supply risk, the firm invests in a costly second production in South America that can be used if the yield in the first production in North America is low. We solve this joint problem of raw material allocation and sequential production by reformulating it as a tractable simultaneous optimization problem. This tractable reformulation provides an exact solution in practical time durations for large assortments of products. We also establish that when profit margins are sufficiently high, sequential production has less cost, on average, than single production. The solution developed is in use at the firm and has led to an estimated increase in profit by 2%–3% annually.

PPM : 戦略的経営計画の立案および実施の方法(DM研修用演習課題及び解説内容の抄出,DM特集号)

PPM : 戦略的経営計画の立案および実施の方法(DM研修用演習課題及び解説内容の抄出,DM特集号)

Continuous Cost Reduction Resilience in Adaptive Responsive Supply Chain

Fashionable products industries are facing greater pressures from market saturation with shorter interval of new add-ons product introductions make easy by open-technology platform proliferation. Consequently responsive supply chain needs to be more adaptive and agile in sustaining continuous cost reduction to be resilience. The study looks at the repercussions of rapid product and technology mutations; higher market volatilities, and the criticality of appropriate systems and methodologies in deliver continuous cost reduction resilience and sustainability. The focus is on fundamental nature of continuous cost reduction (CCR) system and processes; its centrality in adaptive responsive supply chain (A-RSC) amidst market uncertainty which persists to be more vulnerable. In A-RSC with soaring dynamics, it is imperative to fully grasp the structural comprehensiveness, responsiveness and agility to avoid structural incoherency and non consistency. Specifically, the study takes CCR architecture as a whole with its key functional components – core strategic vision, cost management, product portfolio Management, product design and development and product lifecycle management in skilful materializing sustainable CCR. Main objectives of this study are to find the answers to: is CCR process mainly a result of deliberate, carefully planned and managed deterministic competitive strategy in adaptive responsive supply chain? Or it is just evolves through an incremental experiential process going through a sequent of stages towards more resilient and reliable cost reduction? Or cost reduction is just another utility in A-RSC with little strategic value?