{"id":206,"date":"2014-12-11T19:58:47","date_gmt":"2014-12-11T18:58:47","guid":{"rendered":"http:\/\/www.arumba.com\/website\/?page_id=206"},"modified":"2015-01-03T11:02:32","modified_gmt":"2015-01-03T10:02:32","slug":"the-long-tail","status":"publish","type":"page","link":"https:\/\/www.arumba.com\/website\/business-excellence\/the-long-tail\/","title":{"rendered":"The Long Tail"},"content":{"rendered":"

The Consequence\u00a0of High Wages<\/h3>\n

Successful companies in developed countries with high wages had to concentrate on niches. Most mass production is done in low wage countries.As a result, most European companies struggle with the following pattern:<\/p>\n

The long Tail<\/h3>\n

\"Long<\/a><\/p>\n

Fight the Fact<\/h3>\n

Many companies do not accept tis fact and think, that the 80\/20 rule applies. Unfortunately, our experience (based on facts out of live ERP systems) shows, that the rule is more: Only 5% of the products (or variants of products, SKUs) are sold more than once a month. More than 80% of the SKUs are sold only once or twice a year.<\/p>\n

Reducing the product range by 10-30% does not change this situation. The problem stays nearly the same, but strategic positioning can be engangered. Often, these companies are famous because of their product range and flexibility. If they reduce the product range, they lose also their strategic advantage.<\/p>\n

Accept the Fact and Use It As a Strategic Advantage<\/h3>\n

Our proposal is: Accept the fact and look for Economy of Scale somewhere else: In the processesn and not by reducing the number of SKUs. A good process in this “long tail” situations can handle many \u00a0different SKUs the same way and reach economy of scale without reducing the number of SKUs delivered to the customer.<\/p>\n

A clear management of lead-times and pricing can support this strategy and is very important for this concept.<\/p>\n

Product Live Cycle<\/h3>\n

Of course,\u00a0products have an end of live and have to be removed regularly. If your products live 8 years in average, 12% of the products have to be removed every year.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Consequence\u00a0of High Wages Successful companies in developed countries with high wages had to concentrate on niches. Most mass production is done in low wage countries.As a result, most European companies struggle with the following pattern: The long Tail Fight the Fact Many companies do not accept tis fact and think, that the 80\/20 rule […]<\/p>\n","protected":false},"featured_media":0,"parent":25,"menu_order":0,"comment_status":"closed","ping_status":"open","template":"","meta":{"footnotes":""},"class_list":["post-206","page","type-page","status-publish","hentry","post"],"_links":{"self":[{"href":"https:\/\/www.arumba.com\/website\/wp-json\/wp\/v2\/pages\/206","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.arumba.com\/website\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.arumba.com\/website\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.arumba.com\/website\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.arumba.com\/website\/wp-json\/wp\/v2\/comments?post=206"}],"version-history":[{"count":13,"href":"https:\/\/www.arumba.com\/website\/wp-json\/wp\/v2\/pages\/206\/revisions"}],"predecessor-version":[{"id":525,"href":"https:\/\/www.arumba.com\/website\/wp-json\/wp\/v2\/pages\/206\/revisions\/525"}],"up":[{"embeddable":true,"href":"https:\/\/www.arumba.com\/website\/wp-json\/wp\/v2\/pages\/25"}],"wp:attachment":[{"href":"https:\/\/www.arumba.com\/website\/wp-json\/wp\/v2\/media?parent=206"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}