Date: 2023-06-04 Title: Identifying the product deletion decision-making process at a large multinational company Level: Master thesis in Industrial Engineering and Management, Product and Process development - 30 ECTS Institution: School of Innovation Design and Engineering, Mälardalen University Authors: Alan Abdulrahman & Johan Glenne Tutor: Angelina Sundström Keywords: Product deletion process; Product deletion decision-making; Product portfolio management - product deletion Aim: The purpose of this study is to identify how a large multinational company is managing its product portfolios, specifically how they conduct product deletion, and examine to what extent those decisions are influenced by external actors Research question: How does a large multinational company manage its product deletion decision-making and what role do external actors’ influences play? Methodology: This study is qualitative and utilizes an abductive approach where a theoretical framework has been created based on gatherings from a literature study combined with the empirical results based on five semi-structured interviews conducted with both local and global product managers at a large multinational company. Conclusion: This study has successfully identified how a large multinational company works with product deletion decision-making. The conclusion of this study is that the studied company has no formal ways of working with product deletion and that there is currently no way of evaluating a product deletion decision. This study has also identified that the influence that external actors have varies greatly depending on the actor, and the precise amount of influence is impossible to measure.

Product deletion is the end of a product’s life cycle, when it ceases to be produced and is removed from the portfolios of those companies which used to sell them. This project seeks to depict how product deletion is done by manufacturers in Sweden. Product deletion is a scarcely studied subject, which leads to problems such as shortage of existing literature and disconnectedteachings from different perspectives, making the formation of a complete picture problematic.What seems to unify the literature is that product deletion is a valuable tool that is not well enough explored. Through qualitative, semi-structured interviews with representatives from three different companies, a depiction of the relevant aspects of product deletion is formed as it is today. Some aspects were consistent between sources, while others highlighted differences. The similarities were many and considered to strengthen one another as well as the existing literature. The differences were seen as an opportunity for discussion and further studies. The sources agreed that product deletion is of high priority to the operation of a manufacturer. Each participating company therefore spent significant resources to ensure an effective product deletion process. Relevant experience, combined with monetary calculations are highly prized as the backbone of the process. The companies, as well as existing literature, also describe a divide between faster and slower decisions for product deletion. Products which were deemed more important took longer time and more careful consideration before a decision was made than product which occupied less of the company’s focus. Intersections between the groups were rare, showing a clear polarization.Product deletion regularly occurs in tandem with, or as a consequence of, product development. When a new product is made it often replaces an old one, meaning the total product range rarely grows or shrinks in size. Other possible driving forces for product deletion are legal regulations, which might prohibit certain products. Product deletion typically starts as a relatively informal process initiated by monetary calculations and are later applied practically in a more structuredand systematic manner. Preserving investments made in the deleted product and using them for future operations is the primary focus. Considerable contrast was seen in the relationship with product deletion, the level of standardization and how the process has changed historically for each company. Two companies viewed product deletion mainly as a mellow subject and a symptom of error, while the third considered it a great tool for improving their work. This third company also had the most standardized process for product deletion of the three. However, historically, each company had an entirely different development of the process. The clearest possible conclusion would be that each industry, company, and product is unique and needs to be treated as such when considering product deletion. It also seems that companies are not allocating enough resources to product deletion in general. To further our understanding of product deletion a more comprehensive consensus is needed, as well as a clear distinction between meaningful parameters which makes up the holistic understanding of the subject. Through a combination of quantitative and qualitative methodology, each such parameter should be examined in relation to one another. Examples of such parameters could be the different stages of product deletion, quantitative parameters of the product or manufacturer or the culture, structure or relationships of the companies involved. In short, a tighter focus with a wider sample range could give experts on the subject the details they need to construct and refine it.

分析層級程序法在產品刪除決策之應用 / The recent explosion of product management in consumer packaged goods has highlighted the importance of product assortment decisions. In particular, firms are increasingly faced with the decision of which products to delete from distribution. Upon reflection, there are both strategic and tactical dimensions to this decision. Strategic approaches focus on the development of optimal product assortments as the basis for deletion decisions. Tactical approaches address incremental (i.e., item-by- item) decisions whether to delete any product, and if so, which product. This thesis focuses on tactical approaches and proposes using Analytic Hierarchy Process (AHP) as a systematic and analytic tool that helps to quantify the managerial judgments in identifying the candidates for product deletion. Supported by a practical case study, which illustrates how AHP can be beneficial in quantifying both financial and non-financial product performance rankings for managers’ easier understanding and higher transparency of product deletion decision-making.

<p>Produktnedläggning är ett sätt för företag att få bort produkter som inte presterar tillfredsställande. Tidigare studier har visat att företag med ordentliga rutiner kring produktavveckling har kunnat tillgodogöra sig flera fördelar i form av bland annat bättre lönsamhet och försäljning. Ändå har forskning visat att de flesta företag inte har några formella rutiner för nedläggning av produkter och att produktnedläggning inte ses som lika viktigt som andra produktaktiviteter. Av den anledningen studeras i denna uppsats hur väl utvecklade rutiner två utvalda företag har för avveckling av produkter.</p><p>Syftet med uppsatsen är att undersöka hur två utvalda företags rutiner för produktnedläggning ser ut. Resultaten jämförs sedan med den teoretiska referensramen samt mellan företagen i fråga för att urskilja likheter och olikheter.</p><p>Till denna uppsats har en kvalitativ metod använts för att klargöra hur företag går tillväga vid nedläggning av produkter. Genom intervjuer med AB Karl Hedin och Spendrups Bryggeri AB har empirisk data samlats in för att möjliggöra jämförelser företagen emellan samt med den teori som sammanställts.    </p><p>De två studerade företagen har helt skilda förfaranden kring produktavvecklingar. Spendrups har en högre grad av formalitet i sina nedläggningsprocesser där hela kedjan från uppkomsten av en produkt till en eventuell avveckling sker i samråd mellan projektledare, företagsledning och produktansvariga. AB Karl Hedin har inga utformade rutiner kring produktavveckling utan hanterar frågan på respektive ort.  Vad som orsakar produktnedläggning hos respektive företag är dålig lönsamhet och försäljning tillsammans med flera andra individuella faktorer.    </p> / <p>Product deletion is a method that companies can use to abandon products that are not performing satisfying. Studies have shown that companies with routines for product elimination have achieved several benefits in terms of higher sales volume and profitability. Nonetheless, research has proved that most companies do not have formal procedures for product deletion and that it is not considered quite as important as other product activities. For that reason, this essay will examine how highly developed the routines for product deletion are in two selected companies.</p><p>The purpose of the study is to observe the procedures for product deletion in two selected companies. The findings will then be compared between companies in the survey and related to the theory to define similarities and differences.</p><p>A qualitative method has been used to clarify how companies proceed when to abandon products. Empirical data has been collected by interviewing AB Karl Hedin and Spendrups Bryggeri AB for comparison to the theory and between the companies in our study in order to distinguish similarities and differences.</p><p>The companies in the study have different routines when it comes to deleting products. Spendrups has a higher level of formality in their elimination procedures where the top management together with project managers and product managers collaborate all the way from the birth of the product to a possible deletion. AB Karl Hedin has no formal routines for product abandonment. These questions are dealt with at each separate district. What cause the companies to eliminate a product are mainly low profitability and sales volume among several individual factors.  </p>

Produktnedläggning är ett sätt för företag att få bort produkter som inte presterar tillfredsställande. Tidigare studier har visat att företag med ordentliga rutiner kring produktavveckling har kunnat tillgodogöra sig flera fördelar i form av bland annat bättre lönsamhet och försäljning. Ändå har forskning visat att de flesta företag inte har några formella rutiner för nedläggning av produkter och att produktnedläggning inte ses som lika viktigt som andra produktaktiviteter. Av den anledningen studeras i denna uppsats hur väl utvecklade rutiner två utvalda företag har för avveckling av produkter. Syftet med uppsatsen är att undersöka hur två utvalda företags rutiner för produktnedläggning ser ut. Resultaten jämförs sedan med den teoretiska referensramen samt mellan företagen i fråga för att urskilja likheter och olikheter. Till denna uppsats har en kvalitativ metod använts för att klargöra hur företag går tillväga vid nedläggning av produkter. Genom intervjuer med AB Karl Hedin och Spendrups Bryggeri AB har empirisk data samlats in för att möjliggöra jämförelser företagen emellan samt med den teori som sammanställts.     De två studerade företagen har helt skilda förfaranden kring produktavvecklingar. Spendrups har en högre grad av formalitet i sina nedläggningsprocesser där hela kedjan från uppkomsten av en produkt till en eventuell avveckling sker i samråd mellan projektledare, företagsledning och produktansvariga. AB Karl Hedin har inga utformade rutiner kring produktavveckling utan hanterar frågan på respektive ort.  Vad som orsakar produktnedläggning hos respektive företag är dålig lönsamhet och försäljning tillsammans med flera andra individuella faktorer. / Product deletion is a method that companies can use to abandon products that are not performing satisfying. Studies have shown that companies with routines for product elimination have achieved several benefits in terms of higher sales volume and profitability. Nonetheless, research has proved that most companies do not have formal procedures for product deletion and that it is not considered quite as important as other product activities. For that reason, this essay will examine how highly developed the routines for product deletion are in two selected companies. The purpose of the study is to observe the procedures for product deletion in two selected companies. The findings will then be compared between companies in the survey and related to the theory to define similarities and differences. A qualitative method has been used to clarify how companies proceed when to abandon products. Empirical data has been collected by interviewing AB Karl Hedin and Spendrups Bryggeri AB for comparison to the theory and between the companies in our study in order to distinguish similarities and differences. The companies in the study have different routines when it comes to deleting products. Spendrups has a higher level of formality in their elimination procedures where the top management together with project managers and product managers collaborate all the way from the birth of the product to a possible deletion. AB Karl Hedin has no formal routines for product abandonment. These questions are dealt with at each separate district. What cause the companies to eliminate a product are mainly low profitability and sales volume among several individual factors.

One of the most significant changes in the evolution of modern business management is that organizations no longer compete as individual entities in the market, but as interlocking supply chains. Markets are no longer simply trading desks but dynamic ecosystems where people, organizations and the environment interact. Products and associated materials and resources are links that bridge supply chains from upstream (sourcing and manufacturing) to downstream (delivering and consuming). The lifecycle of a product plays a critical role in supply chains. Supply chains may be composed by, designed around, and modified for products. Product-related issues greatly impact supply chains. Existing studies have advanced product management and product lifecycle management literature through dimensions of product innovation, product growth, product line extensions, product efficiencies, and product acquisition. Product deletion, rationalization, or reduction research is limited but is a critical issue for many reasons. Sustainability is an important reason for this managerial decision. This study, grounded from multiple literature streams in both marketing and supply chain fields, identified relations and propositions to form a firm-level analysis on the role of supply chains in organizational product deletion decisions. Interviews, observational and archival data from international companies (i.e.: Australia, China, India, and Iran) contributed to the empirical support as case studies through a grounded theory approach. Bayesian analysis, an underused empirical analysis tool, was utilized to provide insights into this underdeveloped research stream; and its relationship to qualitative research enhances broader methodological understanding. Gibbs sampler and reversible jump Markov chain Monte Carlo (MCMC) simulation were used for Bayesian analysis based on collected data. The integrative findings are exploratory but provide insights for a number of research propositions.