Product Life-cycle in Inventory Management

Woman taking inventory in a warehouse

Every new version of desktop computers, laptops, tablets, smartphones, and other pieces of technology has a limit to the amount of time it can be sold in a specific market. This is known as a product life cycle which is separated into four stages: Introduction, Growth, Maturity, and Decline.


You can tell which part of its life cycle that a product is in by analyzing a number of factors:

  • Total quantity of sales
  • Rate of annual sales growth or decline
  • New markets the product is being sold in
  • Number and relative strength of competitors
  • Number of ancillary products

The way that you manage your inventory changes as your products go from one stage in their life cycles to the next. Let’s discuss each one.


Early adopters are the target market for new, revolutionary products. These are people are on the lookout for the latest gadget, and they’re willing to pay a premium to be at the front of the pack. But being on the cutting edge of technology means that they’re more likely to run into bugs and other unforeseen problems. Thus, early in a product’s life you should have a solid RMA (Return Merchandise Authorization) process in place to quickly respond to customer complaints. You won’t have much sales data to work with since you’re in uncharted territory, so it’s probably best to keep inventory levels fairly low and slowly raise them as time goes by and you’re able to expand your market


As a product becomes more popular and begins to sell more, you should set up an automatic reorder point for it. That way, when the in-stock quantity gets below a certain level you’ll be instantly alerted that it’s time to order more so you won’t run out. Also, if you expand into new warehouses you’ll also need to be able to track your inventory levels and spot sales trends by location and quickly transfer products between them with the help of an automated inventory management system.


Once a product hits its peak, you reach a precarious moment in managing inventory. It’s not as simple as planning for continual growth. Demand will start to fluctuate and level out. Luckily, at this point you’ve had enough time’s worth of data on your ordering and sales that you can put all of that to work for you. You can run reports to discover annual and seasonal sales trends and modify your inventory levels and reorder points to better meet your changing needs.


Every product, especially in the high-tech industry, eventually reaches the point of obsolescence and decline. It might reach the point of saturation, or some new product might come along and blow the old one out of the water. At this point, the focus of inventory management shifts from maintaining or growing to managing the decline. Vendors might stop carrying certain parts necessary to manufacture a product, so you’ll have to keep your supply chain options open. You should also consider restructuring your warehouse to make room for new products and reposition the old product to take into account its falling sales.


Inventory management is the process of hitting a constantly moving target. You can keep up with changing conditions by having the most up-to-date information possible at all times. So whether your product is in the introduction, growth, maturity, or decline stage you’ll know exactly what to do to keep it in stock and moving from your vendors to your warehouses and finally to your customers.


Inventory management can help companies apply different strategies depending on where their products are on their lifecycles. The product lifecycle has four stages:

  • Introduction
  • Growth
  • Maturity
  • Decline

Get a Demo