Expanding a product portfolio is often seen as a sign of innovation and responsiveness to market trends. However, without aligning production processes to business strategy, this expansion can backfire, creating operational inefficiencies that hinder growth.
Below is a summarized real life case study from one of our clients that demonstrate show a company's inability to adapt its operations to a growing portfolio stalled its sales potential—and how process optimization has turned things around.
The sales team faced an uphill battle. While demand for the company's top-selling products remained strong, production bottlenecks meant delivery commitments couldn’t be met. Sales growth was capped—not by the market but by internal inefficiencies.
Established Demand: The top-selling products were proven market winners for 2-3 years.
Overloaded Portfolio: In 2023 alone, 25 new collections were added, followed by 12 more in early 2024. No older products were retired.
Delivery Failures: Growth opportunities were lost because production couldn’t keep up.
A closer look at operational data revealed how the company’s rapidly growing product portfolio became a significant barrier to efficiency and growth.
Shift to High-Mix, Low-Volume Production:
As the product portfolio expanded, production shifted from larger, predictable batch runs to smaller, fragmented orders. Single-set batches grew from 14% to25% of total production volume, introducing significant inefficiencies. Each small batch required unique setups, frequent machine adjustments and specialized handling, stretching production schedules and increasing lead times.
Fabric and SKU Variability:
With more products came a wider variety of fabrics, components, and SKUs. This variability not only complicated production planning but also increased material storage requirements and inventory costs. The factory struggled to maintain the right balance of raw materials, leading to frequent delays caused by out-of-stock items or mismanaged supply.
Portfolio Imbalance:
The continuous addition of new models without retiring older ones created an unwieldy portfolio. While high-performing, well-established products remained in demand, they competed for production resources with lower-volume, less profitable items. This imbalance diluted the factory’s operational focus, as limited capacity had to be spread across too many SKUs.
Hidden Complexity:
The expanded portfolio introduced unseen complications in areas like quality control, logistics and assembly. Each product variation required additional attention at every production stage, from initial planning to final delivery. The cumulative impact of these hidden complexities was a growing inability to meet delivery commitments, even for top-selling products.
The expanded portfolio wasn’t just a challenge for production—it was a direct threat to the company’s business strategy. While the sales team worked hard to secure growth opportunities, operational inefficiencies meant they couldn’t deliver on their promises. The disconnect between product variety and production capability created a bottleneck that stifled revenue and risked damaging customer relationships.
To unlock growth, the company needed to optimize its processes and strategically manage its product portfolio.
Portfolio Rationalization:
• Implemented annual reviews to phase out underperforming products.
• Focused on derivatives of existing designs rather than launching entirely new collections.
Operational Adjustments:
• Shifted planning models to accommodate high-mix, low-volume production.
• Streamlined material flows to handle smaller orders without increasing lead times.
• Partnered with R&D to design new products with manufacturability in mind.
Cross-Department Collaboration:
• Conducted joint sales and production workshops to align goals and eliminate blind spots.
• Used data-driven analysis to prioritize products and focus on high-value opportunities.
By integrating process optimization into its business strategy, the company achieved:
• Improved Efficiency: Reduced lead times and increased production capacity.
• Rationalized Portfolio: Focused operations on high-value products, phasing out inefficiencies.
• Enhanced Collaboration: Sales and production teams worked in sync, avoiding delivery failures.
The result? The company met its sales targets, capitalized on market opportunities and set a foundation for sustainable growth.
An expanding product portfolio is a double-edged sword. Without operational alignment, growth opportunities turn into inefficiencies. This case highlights the critical role of process optimization and business strategy in sustaining growth:
Rationalize Regularly: Portfolio bloat kills efficiency. Regularly evaluate and trim underperforming products.
Adapt Operations: High-mix, low-volume production requires flexible planning and streamlined workflows.
Collaborate Strategically: Aligning sales and production through shared data and goals is non-negotiable.
With the right approach, companies can turn operational challenges into competitive advantages, ensuring their product portfolio drives—not hinders—growth.
