Silos between inventory and life cycle are costing you margin
Most businesses treat inventory and product life cycle as separate workstreams. Inventory is owned by the supply chain. Life cycle sits with product managers. The result? Silos. Decisions made in one area don’t translate into the other. Different systems, different priorities, different ways of working. That disconnect shows up fast. You get overstock when demand drops. Shortages when interest spikes. And you keep paying for products that should have been exited months ago.
Sound familiar? If it does, this isn’t a system issue. It’s a process gap. When product life cycle changes are not tied directly to inventory decisions, the business absorbs the cost. Aged stock. Lost margin. Missed sales. Strained supplier relationships.
This isn’t fixed by throwing more data at it. It’s fixed by shared process, clear ownership, and regular reviews. When inventory management and life cycle planning are aligned, the entire business moves with more control, fewer surprises, and no silos.
The cost of broken supply chain processes
The product life cycle is often treated as a commercial concept, something owned by product teams or used for sales forecasts. It maps the journey from launch (Introduction) to growth, maturity, and eventual decline. That framing is not wrong, but it is incomplete. Every stage of the life cycle directly affects how Inventory Management, Procurement, Sales, Finance, and Product Management should operate.
A new product in the introduction stage requires controlled buying, limited exposure, and clear volume agreements. During growth, inventory must respond quickly to demand signals, procurement must manage supplier agility, and sales must track shifting customer interest in real time. In maturity, tighter cost control and stock efficiency become critical. Inventory Management focuses on lean replenishment, procurement shifts to value engineering, and finance begins to protect margin. If a product moves into extension, commercial and operational teams must agree whether the goal is volume stretch, margin recovery, or a managed exit. In decline, decisions must be made about last buys, supplier offboarding, and clearing remaining stock. Too often, that transition is missed or delayed.
The issue is not that teams are unaware of where a product sits in its product life cycle. The issue is that the change does not trigger a shift in decisions or behaviour. Inventory keeps flowing as if nothing has changed. Procurement continues with the same terms. Sales push outdated bundles. Product Management moves on. The product life cycle becomes a passive label rather than an active operational signal. Let’s look at life cycle stages – siloed vs aligned with department roles:
Product life cycle stages with aligned departmental roles
Inventory is the scoreboard of your process discipline
Inventory is not just what sits on your shelves. It is the output of the decisions your teams make. When product life cycle transitions are handled well, inventory flows match demand with minimal waste. When transitions are missed, inventory balloons in one area while running dry in another.
You can tell a lot about a business by how its inventory behaves. A buildup of ageing stock points to missed product life cycle signals. Shortages during ramp up show that planning lagged behind sales activity. Over ordering in decline suggests the forecast was never revised or assumptions were not challenged.
These are not just operational hiccups. They are signs that your inventory planning is reactive rather than structured. They show where product life cycle information is not reaching the people who need it when they need it. And they tell you which decisions are being made with outdated or assumed inputs.
Where it goes wrong: a common breakdown
Let’s take a typical example:
A manufacturer launches a new industrial component. The forecast assumes strong demand from a key customer based on a project timeline. Planning builds the forecast. Procurement places the order. Stock lands on schedule. Everyone did their part.
But the customer delays the project due to certification issues. Sales knows the delay but does not update the forecast. Planning never receives a new timeline. Procurement executes based on the original plan.
Six months later, half the inventory is still in the warehouse. The customer has not placed their first order. Storage costs have risen. Working capital is locked in. Teams are under pressure to clear the stock. Trust in planning erodes. Procurement blames sales. Sales blames planning.
The problem was not the forecast model. It was the absence of a joint process that linked lifecycle events to planning updates. No one flagged the delay. No one owned the assumption. And no one had a system to catch the gap before it turned into excess.
What good looks like design the connection
Now picture the same scenario with a connected process.
When the customer project is delayed, sales is required to update product life cycle assumptions in a shared planning tracker. That triggers a review in the monthly forecast cycle. Planning revises the volumes. Procurement holds back on the next order. Inventory is kept lean.
The delay is visible, documented, and acted on. No one is surprised. No one is scrambling. Everyone works from the same facts.
That level of control does not come from better systems. It comes from a better process. One where product life cycle changes are built into the planning rhythm. One where ownership of inputs is clear. One where cross functional reviews are standard, not optional.
Obsolescence is a leading indicator
Obsolescence is not a warehouse problem. It is a symptom of process failure further up the chain. Aged stock is often the result of products that stayed in the portfolio too long, were bought too heavily at the wrong time, or lost demand without that signal reaching planning.
When teams treat obsolescence as an outcome they cannot control, the cost keeps rising. But when obsolescence is tracked by product life cycle stage and investigated for root cause, it becomes a powerful indicator of where the process is weak.
If you regularly see write offs in declining products, that is not just a supply issue. It means product life cycle planning was passive or absent. If you see overstock in mature items with falling demand, it means forecasts were not revised or assumptions were not challenged.
Used properly, obsolescence rates help target where the PLC and inventory connection is broken. They show where decisions need to be more deliberate. And they help teams shift from reacting to preventing.
Build the bridge between PLC and inventory
So how do you actually connect product life cycle and inventory management in practice Not with more reports. Not with new software. But with a simple structured workflow that drives the right actions at the right time.
Start by creating product life cycle checkpoints. Every product should be reviewed at set intervals based on its maturity and demand pattern. These reviews should trigger changes to forecast assumptions, inventory targets, and procurement plans.
Next, align ownership. Product managers own the product life cycle stage. Planners own the forecast. Procurement owns supply timelines. But all must operate from shared inputs. That means documented assumptions, visible changes, and real time updates that everyone sees.
Integrate planning cycles. Forecast updates should include inputs from sales, product management, and procurement. Product life cycle changes must feed directly into inventory decisions. Inventory management uses that input to plan stock. Procurement needs clear visibility of upcoming shifts before placing orders.
Build trigger indicators into the process. Your teams must know what signs indicate a product is changing stage, whether it’s declining orders, margin pressure, customer pushback, or shifting project timelines. Make stage transitions visible, expected, and acted on.
Measure what matters
Most businesses track forecast accuracy. Fewer track where the error came from. Was it a demand spike, an assumption gap, or a product life cycle miss? That clarity makes all the difference.
Add KPIs that reflect joint ownership. Track inventory ageing by product life cycle stage. Measure forecast error against product life cycle assumptions. Calculate obsolescence as a share of sales by business unit. Use these to improve the process, not just report on what already happened.
Where it goes wrong – no shared product life cycle process
1. Action: Forecast created – Based on assumed customer timeline.
Responsible: Product Management, Inventory Management
Outcome: They build the forecast using available information but do not validate or confirm customer timelines with sales.
2. Action: Procurement orders placed. Stock delivered as scheduled.
Responsible: Procurement
Outcome: Procurement acts on the forecast without questioning assumptions or checking for product life cycle changes.
3. Action: Customer delays project. Sales informed but does not update forecast or inform departments.
Responsible: Sales (internal responsibility), Customer (external trigger)
Outcome: Customer changes schedule, Sales is aware but does not feed the update back into the process.
4. Action: Inventory Management not informed. No quantity change. No adjustments. No change.
Responsible: Inventory Management
Outcome: Planning continues based on the old forecast. No red flags are raised, and no one reviews the quantities.
5. Action: Procurement continues ordering based on outdated forecasts, data, and assumptions.
Responsible: Procurement
Outcome: No stop purchasing indications. Orders continue to be sent to suppliers, even though demand on original forecast no longer exists.
6. Action: Inventory builds up. Stock sits idle in warehouses, tying up working capital.
Responsible: Inventory Management
Outcome: Stock accumulates because planned and forecasted sales never materialise. Warehouse space, cost, and working capital are hit.
7. Action: All departments react too late, Excess write-offs, internal blame, and loss of trust in process affect both internal teams and customer relationships.
Responsible: Product Management, Inventory Management, Procurement, Sales, Finance
Outcome: By the time the issue is visible, the margin is already lost. Root cause is found, but too late to avoid the cost.
What good looks like – connected product life cycle and inventory process
1. Action: Customer delay is visible across teams.
Responsible: Product Management, Inventory Management, Sales
Outcome: Sales confirms the change. Product Management and Inventory Management update the product life cycle status and forecast accordingly.
2. Action: Inventory Management adjusts volumes with Procurement.
Responsible: Sales, Inventory Management, Procurement
Outcome: Sales logs the delay in the shared tracker. This prompts Planning to revise the forecast and align with Procurement before any new orders are placed.
3. Action: No excess orders placed.
Responsible: Procurement
Outcome: Procurement acts on the updated plan and avoids committing to over ordering resulting in excess stock.
4. Action: No excess stock, no working capital tied up.
Responsible: Inventory Management
Outcome: Inventory reflects current demand. Working capital remains available.
5. Action: Decisions are based on facts, not assumptions.
Responsible: Product Management, Inventory Management, Procurement, Sales, Finance
Outcome: Cross-functional visibility avoids assumptions. Margin is protected. Trust in the process is reinforced.
The difference was not the system. It was the process discipline. Assumptions were owned. Updates were timely. Reviews were routine. And the result was better control, better collaboration, and better margin.
This is about process discipline not perfect predictions
No forecast is perfect. No product life cycle transition is clean. But when the two are managed together, you do not need perfection. You need visibility and control. That comes from structure, not software.
The businesses that handle this well do not wait for systems to fix the issue. They build workflows that tie product changes to planning changes. They create roles that own the signal. And they embed review cycles that catch issues before they hit the warehouse.
When inventory and product life cycle are managed in sync, the result is not just cleaner stock. It is stronger decisions. It is reduced waste. It is fewer fire drills. It is working capital freed to invest elsewhere.
Final thought
Inventory management and product life cycle are not two problems. They are one process. If they are not connected, your business is always playing catch up. You are spending margin to fix avoidable issues.
But when they work together, your operation runs with more clarity. You buy what you need. You exit what no longer moves. You plan with purpose instead of reacting with cost.
Stop treating inventory and product life cycle as isolated functions. Start treating them as two sides of the same process. That is how you protect margin, reduce waste, and regain control.
When product life cycle is disconnected, it does not just slow decisions, it drives communication gaps, poor planning, and lost margin.