The optimal product portfolio: Close to the market, future-proof, free of gaps and overlaps
Sustainable market success with a future-proof product portfolio
Systematic optimization of the product portfolio anchored in own processes
Develop coordinated strategies for the future
Implementing strategies for product lines and the overall portfolio
Coordinate product and portfolio decisions early and reliably
Portfolio Optimization Cross-discipline Product Development Portfolio SegmentationDecision VelocityDesicion Quality
The METUS solution for optimizing the product portfolio is divided into five fields of action. Tangible results can be shown immediately in each step.
- Portfolio segmentation: Differentiation by application areas quickly reveals gaps and overlaps between product lines and enables the portfolio to be aligned with current and future requirements.
- Optimization at portfolio level is achieved by defining services and functions (e.g., apps, pay-per-use services) that can be implemented across product lines.
- Optimization at product line level: A structured view of the product lines from a portfolio perspective makes it possible to identify potential for cross-technologies and reduce long tails.
- Optimization of processes: Differentiation by order type ensures simplified and faster processes.
- The introduction of sustainable portfolio management in the organization succeeds through methodical empowerment, software support and the integration of all product decision-makers by means of web-based stakeholder cockpits.
More about sustainable portfolio optimization with METUS
Sustainable portfolio management must be anchored in the company; one-off consulting initiatives are not sustainable.
What do you need to be able to do? Product managers are in a position to make the right decisions early and reliably through high market and product visibility and transparency in order to optimally future-proof the company's portfolio.
How do you go about it? Company-wide portfolio management requires a methodical foundation and anchoring in the organization, processes and systems. The To-Be portfolio can thus be identified and implemented in the product architectures of the individual product lines and at portfolio level.
In our consulting practice, we usually see three problem areas that need to be addressed:
- No consistent market and product planning
- The target applications of the product lines are unclear and not clearly defined.
- Lack of transparency leads to gaps and overlaps, especially in mature portfolios
Simply put: Making the right decisions.
Portfolio decisions must be made at a time when important decisions in product development are still possible and can be implemented cost-effectively - in other words, early on. But not only do they have to be made early, they also have to be made correctly, otherwise the product will not meet market demand.
The problem is that at this point in time, much of the data relevant for decision-making is not yet available, or it is scattered in various systems and difficult to put into context.
If you build product architectures in such a way that they map all the relevant dependencies, you create the necessary transparency for correct and early product decisions.
Portfolios should be continuously optimized in view of changing conditions. In our view, a pure consulting approach is not enough.
We therefore believe that all product managers need to be methodically empowered. Based on this, software with visualizations and scenarios can provide good support for planning and coordination.
Not absolutely. However, for well-founded portfolio decisions, numerous dependencies and links within and between the individual product lines must be identified, visualized and evaluated. This is easier with systems designed for this purpose, such as METUS, than with the tried-and-tested spreadsheet.
In addition, occasional users should also be able to use visualizations and scenarios. This also rules out complex engineering tools.
The approach we usually propose involves five steps:
- Portfolio segmentation: differentiation by target applications.
- Portfolio-level optimization: reuse of concepts and technologies
- Product line optimization: Variance optimization and modularization
- Optimization of processes: product development and order processing
- Establishment and anchoring of sustainable portfolio management
We first look at the portfolio from the point of view of target applications, i.e.: Which customer application does a particular product line fulfill?
Target applications can then be easily applied and compared in a matrix of requirements and characteristics. This also includes looking at the different order types - in mechanical engineering, for example, segmentation according to configurable and customer-specific order types.
Grown product portfolios often make it difficult to compare the individual product lines with each other and thus to identify overlaps and gaps.
This is hardly possible when comparing the (solution-specific) physical components of a product.
Comparability is only created by a (solution-neutral) function structure: if you look at what a component does — and not how the function is implemented — you create the necessary comparability and the basis for portfolio adjustment.
Good portfolio management will show positive results at several points in the value chain:
- Optimization of requirements leads to reduction of variance
- Standardization of functions leads to reduced complexity
- Standardized components increase speed and reuse
- Adapted processes (order fulfillment and product development) increase speed
- Standardization and modularization enable supplier bundling and economies of scale in purchasing
“ID-Consult provided first-class support in consolidating our sensor portfolio, which had grown over 25 years, in a very short time.”
Director Business Unit Sensors, Pepperl+Fuchs GmbH