David Zatz defines risk management from both the supply and demand side of the equation. He views risk management as more of a generalized business risk and doesn’t see anything in recent activity which would lead him to believe that risks are increasing or decreasing. However, David certainly sees opportunities to lessen risk. Those (risks) have always been in place and continue to be in place.
Actions Taken to Minimize Risks
David believes one action to minimize risk is to manage the complexity of your product portfolio. He also thinks it is not just managing the complexity but also product portfolio management in general. This is an underutilized practice that can yield some significant results.
What would product portfolio management entail?
It basically means a holistic view of your product portfolio. It is the means by which you decide whether you discontinue a product or not, or whether you launch a product or not. You need to have a pretty firm idea of your corporate strategy, of the kind of businesses you want to be in. Then you need to reflect that strategy into your product portfolio. When you are coming up with a new line extension you better ask yourself if that product or line extension is supporting your corporate mission. Sometimes you can get lost in the trees and not see the forest.
Cross Functional Collaboration between Operations and Sales/Marketing
David Zatz doesn’t think you can have a product portfolio management process without multi-functional active involvement. In particular, involvement is needed by leaders in those functions. It is not the type of function you can push off to lower or middle management. Senior management must be involved in the decision making process managing your product portfolio.
Most companies are under managing the complexity of their product portfolio. There are a lot of products that you launch. There are a lot of locations that you move into. There are a lot of businesses that you expand into which at the end of the day do not make your company any more money and in fact drain profits from your company. This is not always readily obvious unless you are measuring it.
David has spent a lot of time fine tuning my relationship management skills in an attempt to expand business development for consulting services. Functionally, what makes David unique is product lifecycle management (PLM). He thinks PLM is also a little understood and under utilized function that bring tremendous savings through collaboration and through trying to follow a strategic mission in many consumer products and other industries.
Approach to Solving PLM problems
Probably the best solution involves implementing some enterprise-wide PLM software. Perhaps a module of your existing enterprise systems or stand-alone systems, which ever fits your IT configuration set. David thinks that often the systems can often put the business process discipline into place that is needed to make PLM successful.
About David Zatz
David is working on a paper that I will be publishing on product life cycle management and project portfolio management.
Supply Chain Consulting