The Salesforce CPQ Business Analyst: Addressing the Challenges of Product SKU Proliferation

Product SKU proliferation refers to the uncontrolled growth of product Stock Keeping Units (SKUs), often resulting in duplicated or unnecessary products. This can lead to various operational and sales challenges.

Company Profile: Company Name: HealthTech Supplies Inc.

• Industry: Healthcare Products

• Description: HealthTech Supplies Inc. is a leading manufacturer and distributor of a wide range of healthcare products, including medical devices, surgical instruments, and disposable medical supplies. Their products cater to hospitals, clinics, and medical professionals.

Scenario Description:

HealthTech Supplies Inc. started with a modest catalog of healthcare products, but over the years, they introduced a wide range of similar products to cater to various market demands. This led to SKU proliferation issues.

For instance, they may have introduced multiple SKUs for a single type of syringe with different needle sizes, materials, and packaging. Each minor variation resulted in a new SKU, contributing to SKU duplication.

As a result, the system is overloaded with products that have very minimal differences, and the product catalog has become cluttered and difficult to manage.

This proliferation has created confusion within the organization and among customers, affecting the efficiency and accuracy of the sales process.

Challenges:

1. Excessive Duplication: Over time, the company has introduced similar products with minor variations, leading to an excessive number of SKUs. For example, they may have created different SKUs for the same type of surgical gloves with varying sizes and packaging.

2. Complex Pricing Structure: Managing different SKUs with overlapping features has made pricing and discounting complex, often resulting in inconsistencies and errors in quotes.

3. Confused Sales Team: The sales team finds it challenging to navigate the vast SKU catalog, leading to delays in generating quotes and sometimes recommending the wrong products to customers.

4. Inventory Management Issues: Managing inventory and restocking has become a headache due to the numerous SKUs. This results in excess or insufficient inventory of specific products.

5. Customer Confusion: Customers also struggle to identify the right product from the catalog, leading to potential dissatisfaction and order errors.

Proposed Solutions:

1. SKU Rationalization: HealthTech Supplies Inc. needs to undertake a comprehensive SKU rationalization process. This involves identifying redundant SKUs and consolidating them into a single SKU, or introducing a more structured SKU hierarchy that reduces complexity.

2. Streamlined Quoting Process: To simplify pricing and discounting, the company should consider implementing a standardized pricing strategy. This can involve bundling related products, offering package deals, and simplifying discount structures.

3. Sales Training: The sales team should receive training on the revised SKU catalog and quoting process to ensure they can efficiently guide customers and generate accurate quotes.

4. Inventory Management Software: Implementing an advanced inventory management system that can handle a smaller, optimized SKU catalog will help in managing stock levels more efficiently.

5. Customer Education: HealthTech Supplies Inc. should also focus on educating their customers about the revised SKU catalog, helping them find the right products easily.

Rationalizing Product SKU Catalogs using Salesforce CPQ Configuration Attributes:

Salesforce CPQ (Configure, Price, Quote) is a powerful tool that can be used to manage SKU proliferation issues by using configuration attributes effectively. Here's how you can do it:

1. Identify SKU Duplication: First, you need to identify the duplicate or overlapping SKUs in your product catalog. This may involve a thorough SKU audit to understand where duplication is occurring.

2. Define Configuration Attributes: Salesforce CPQ allows you to define configuration attributes for your products. These attributes can be used to capture product variations and customize SKUs based on customer requirements. For example, if you have different sizes, materials, or packaging options for a product, create configuration attributes for these options.

3. Create Product Bundles: Instead of creating individual SKUs for every possible product combination, create product bundles. Bundles are configurations of multiple products or attributes that customers can choose. For instance, if you have surgical gloves with options for size and packaging, create a bundle that includes these attributes.

4. Simplify Pricing Rules: With CPQ, you can define pricing rules based on configuration attributes. Set up price tables and discount structures that automatically adjust based on the customer's selected attributes. This eliminates the need for managing pricing for each SKU separately.

5. Guided Selling: Use CPQ's guided selling features to assist your sales team and customers in selecting the right product configuration. The system can guide users through attribute selections, ensuring they choose the appropriate options for their needs.

6. SKU Hierarchy: Organize your products in a hierarchical manner. For instance, create a parent SKU for a product category and then use configuration attributes to differentiate subcategories or variations. This simplifies navigation within the catalog.

7. Validation Rules: Set up validation rules in CPQ to ensure that incompatible configuration attribute combinations are not selected. This prevents customers and sales representatives from creating invalid or nonviable configurations.

8. Dynamic Product Rules: Leverage CPQ's dynamic product rules to automatically hide or show certain attributes and options based on previous selections. This keeps the configuration process streamlined and user-friendly.

9. Standardize Naming Conventions: Ensure that the naming conventions for configuration attributes are consistent and easy to understand. This helps in catalog management and reduces confusion.

10. Training and Documentation: Provide training to your sales team on how to use the CPQ system effectively. Create documentation that outlines the new SKU management process and how to utilize configuration attributes.

By implementing these steps, you can use Salesforce CPQ to effectively manage SKU proliferation issues. Instead of having an overwhelming number of SKUs, you will have a more structured and efficient system that allows customers to customize their orders while maintaining a manageable product catalog. This streamlines your sales process and minimizes SKU-related challenges.

In conclusion, addressing SKU proliferation in the healthcare products industry is essential for streamlining operations, improving customer satisfaction, and increasing overall efficiency. By taking a structured approach to SKU rationalization and process improvements, HealthTech Supplies Inc. can overcome these challenges and position itself for sustainable growth and success.