The PDMA Handbook of New Product Development

34.3. Evaluating Products for Obsolescence

To evaluate products for obsolescence, various questions should be asked that include: Does the Product sell? Is the product out-of-date? What about competition?

34.3.1. Does the Product Sell?

The most fundamental reason to discontinue a product is lack of sales. If no one is buying a product, it usually follows that a company should stop producing it and no longer offer it for sale. This lack of interest may be due to a number of factors, but only a few reasons to continue production of a low-performing product are valid and warrant consuming the resources required to maintain production capability and inventory, and to support sales. Don't be lured into the trap of inaction by pandering to sentiment and emotion that because "we've always made them" production can't ever stop. According to the profile of its products, each company should establish guidelines for acceptable levels of annual sales dollars and units sold. These parameters will help determine which products are candidates for obsolescence.

NOTE

The most fundamental reason to discontinue a product is lack of sales.

These obsolescence guidelines must be tempered with industry, product, and customer knowledge. If a fixed value of sales dollars alone were to be the criteria for obsolescence, the purveyors of low-priced items would frequently plan the discontinuance of products whose revenue is, in fact, substantial overall for that industry. Likewise, the unit sale count among ...