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How should we manage a new product introduction which is super successful?
Imagine a situation where a new product is introduced by our company. The supply chain team has ensured that enough volume is available to cover the projected sales plus about 50% upside. Consumers love the product announcement, come to stores, lap up the product… it starts flying off the shelves and before we know it, there are cries of stockout from all over. Sounds familiar?
How do we respond to such a situation? The future of this product depends entirely on how flexible and responsive our supply chain is. If we take a few weeks to make more units available on retail shelves, the consumers may get tired of seeing empty shelves by then and may stop looking for it.
On the other hand, if we have a good demand sensing engine which tracks actual market demand from day one of the launch, updates it daily, deciphers the emerging pattern, and gives us reliable demand projections for the near term, we would get a very early trigger to expedite more production. This trigger would come much before the retail shelves get stocked out.
To top it up, if our supply chain is flexible and responsive, we are likely to manage additional supplies well in time, thereby ensuring a super successful launch.
It may sound paradoxical, but many new product introductions fail because they are super successful!