In contrast, only 5% of Campbell’s products are new each year. Sales of existing products, most of which have been on the market for years, are highly predictable, allowing Campbell to achieve a nearly
perfect service level by satisfying more than 98% of demand immediately from stocks of finished goods.
And even the few new products are easy to manage. They have a replenishment lead time of one month
and a minimum market life cycle of six months. When Campbell introduces a product, it deploys
enough stock to cover the most optimistic forecast for demand in the first month. If the product takes
off, more can be supplied before stocks run out. If it flops, the six-month, worst-case life cycle affords
plenty of time to sell off the excess stocks.