Product deletion and supply chain repercussions: risk management using FMEA

Abstract

PurposeProduct portfolio management is a strategic concern. Product portfolio management includes decisions associated with adding new products, maintaining existing products and deleting or phasing out problematic products. This paper first introduces a framework to identify risks of product deletion along supply chain activities. It utilizes failure mode and effects analysis (FMEA) to identify, analyse and evaluate product deletion risks on supply chains and proposes managerial implications for risk management in dynamic business scenarios. It is meant to build upon and address a gap in the product deletion and supply chain linkage literature.Design/methodology/approachFMEA is utilized in this study to structure and manage potential risks in product deletion decision-making on supply chains. FMEA is based on an analysis of severity, occurrence and detectability of failure modes. FMEA provides methods to help identify managerial preventive solutions to avoid and mitigate risk consequences of such decisions.FindingsTen top product deletion risks are identified in this study; discussions of their negative impact on supply chain performance, and possible managerial recommendations are followed for risk control, monitor and elimination.Practical implicationsFindings help managers to predict, avoid and mitigate risk consequences of product deletion decisions; especially those related to the supply chain. A framework to structure various risks of product deletion in the supply chain can be useful to both practitioners and researchers.Originality/valueThis study advances product portfolio management through enhanced understanding of product deletion decision-making in organizations; and especially contributes to a broader investigation of such decisions in supply chain management. It also structures the factors that play a role in identifying risks.

Formalizing the strategic product deletion decision: incorporating multiple stakeholder views

“…When a product is deleted, suppliers of specific materials will no longer be needed; or alternatively certain supplier outcomes may include reduced demand and higher unit prices (Shah, 2019; Zhu et al. , 2020a, b). Supply chain strategies are assessed from multiple operational processes and activities including sourcing, manufacturing, distribution and product usage and servicing (Stavrulaki and Davis, 2010).…”

“…Companies often find it hard to predict the outcome and bear the risks evolving from the decision-making and implementing processes (Harness, 2004; Zhu et al. , 2020a, b). PD risks and concerns suggest the need for decision models that recognize the unique firm, product portfolio and performance measurement environment within and across the supply chain.…”

“…Another reason is that Product Deletion (PD) is a less appealing managerial activity and responsibility (Alexander, 1964; Zhu et al. , 2020a, b). Few managers find loss and possible negative PD as palatable or enjoyable making such decisions risky and emotionally draining.…”

“…Organizations and managers should be cognizant of the potential impact to supply chain stakeholders throughout the PD decision-making process (Zhu et al. , 2020a, b). These impacts need to be managed in the short term and may affect customer relationships in the long term.…”

“…, 2019, 2020; Zhu et al. , 2020a, b, 2021). Deleting certain products alters product portfolio diversity and operational complexities.…”