Handle the SKU That Looks Unprofitable
Use ABC output to evaluate product action without confusing activity cost, capacity, and strategy.
The margin shock One SKU looks like a loser, but leaders disagree about whether the cost is avoidable or strategic. Bad ABC reactions kill value; good reactions change the activity that creates the cost. Decision path Validate -> separate capacity -> choose lever A product-level ABC result needs interpretation before action. Kill it Fast but often wrong A decision tied to economics, not panic. Do not discontinue until you know whether the activity cost can be changed. 01 Validate 02 Capacity 03 Lever Step 1 The SKU absorbed high setup and engineering-change costs.
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