MIT SCM Symposium 2024

Newell Brands, a conglomerate with a diverse product portfolio, has traditionally relied on financial metrics for SKU rationalization. Now, they are seeking a SKU rationalization strategy for “Pen” portfolio to eliminate SKUs that add more complexity to the Bill of Material (BOM) with least value creation. How can Newell Brands use a combination of financial and BOM metrics to infer the criterion for SKU rationalization? The methodology involved data analysis, relevant metric selection, development of a rating system, and a three-step procedure for SKU rationalization. We obtained results that adjusting the ratings for each metric can help optimize the product portfolio in accordance with business requirements. The methodology can be extended to other product portfolios too. Conclusions highlight the effectiveness of the methodology in identifying SKUs for rationalization and the importance of considering unique components in the analysis.