Sales team was more concerned of adding newer products to the existing portfolio so that diversity of products and wider choice would appeal to customers who are constantly on the lookout for newer and better products. Thus bonuses and targets were their prime concern. On the other hand the supply chain team was highly worried about out-of-stock inventory mix. When 30% of SKUs are registering below sales targets in volumes and profits, there is something really to worry about. The supply chain team was also worried about the service related challenges in order to fulfill customer demand (Scholz-Reiter, Frazzon & Makuschewitz).
Against this backdrop a more comprehensive SKU rationalization strategy would be pertinent though it’s equally imperative to know how best to avoid supply chain bottlenecks and associated costs by way of reducing inventory of no-go-products. In other words a rationalization strategy would require a number of tasks to be performed before putting into effect any program of action.
In managing supply chain related activity in procurement of materials the purchasing manager or the specialist has to perform a series of tasks according to some predefined criteria. In the same way the purchasing manager or the supply chain team has to take it to consideration the number of factors that directly and indirectly impact on their performance. In the first instance skills of the supply chain team would be enhanced by the vertically integrated organizational and management structure which essentially support the design planning and implementation of supply chain strategies, especially those directly related to the purchase of raw material and components for primary operations. Clorox was just faced with this problem (Hugos, 2006).
The purchasing specialist has to focus on his tasks associated with procurement and management in order to achieve a degree of functional conformance to established standards such as the core business activity