In a recent IndustryStar poll, 40% of respondents highlighted that the ability to acquire early cost data is the single greatest challenge holding them back from bringing earlier supply chain intelligence data into product development. The same group of professionals outlined that cost reduction was the third most important reason for involving supply chain input earlier in product development.
That result surprised us because lead time reduction, accelerating suppliers’ timing, followed by time to market reduction, and accelerating product launches were rated higher than cost reduction as the most important reasons for involving supply chain during new product development. Product development cost and time reduction are both areas of heavy interest for incorporating earlier supply chain data into building better products.
Further, consumers prefer innovation. A Nielsen global survey found that 63% of consumers like when manufacturers introduce new products.
The data is clear, consumers prefer innovation, and we as supply chain professionals need to find ways to deliver innovative new products at a lower cost and in less time. So, the question we should ask ourselves is, “How do we infuse supply chain intelligence earlier into new product development to accomplish this?” We recommend using the four tips discussed below.
4 Tips to Infuse Supply Chain Intelligence Earlier into Product Development
1. Join the Conversation
As supply chain professionals, we’re good at what we do. We’ve developed unique tools and our own language for our craft. Our colleagues in design and engineering are the same way. They have their acronyms and jargon that admittedly can be a bit intimidating for those unfamiliar.
We need to lean into early product development involvement opportunities and ensure our teams are actively participating in conversations with their cross-functional counterparts. The best new product ideas will blossom at our companies when we understand our roles and our early product metrics, customer pains, functionality, and performance. Start there to quickly build rapport with your colleagues.
“A number of factors must be accounted for and they’ll have to fit together as a puzzle; all this stuff coming together will either determine product success or failure,” says Michael Prince, President of strategic product design consulting firm Beyond Design. It’s with a humble curiosity that we must first understand our colleagues’ early commercial needs and then actively work to solve them. It does our colleagues, companies, and ourselves no good to be multitasking and sifting through emails during meetings.
The best way we can learn about our colleagues’ commercial headwinds is to be mentally present and fully available as a resource in product development meetings.
2. Become a Broker of Commercial Information
A common engineering gripe whispered by the water cooler is that supply chain is too busy to help; they’re only focused on production, not the next big thing in development. There’s certainly a bit of truth to this and to some extent maybe rightfully so.
As current production products generate the revenue that pays everyone’s salaries, it’s right to focus adequate supply chain effort toward what pays the bills. But companies that have little to no supply chain involvement in new product development are being short sighted by gambling their future revenues.
Hardware product introduction timelines are becoming shorter while product complexity is increasing in the astounding number of connected products, from construction equipment to medical devices. Thus, developing the products of the future is adding to a greater labor of love that requires more things go right earlier in the process. Kicking the commercial metrics down the road to when your supply chain team has time to get involved is a bet fewer companies are making.
“Internet of Things products are a whole new frontier, the analytics we receive allow products to be better maintained and thus last longer, so as designers we need to consider a wider spectrum of alternative materials up front in product development,” explains Prince.
Supply chain is uniquely positioned to fill the need for greater market data earlier on in new product development. It’s critical to your company’s success to elevate supply chain’s perceived versus actual role in your organization as the key “broker of commercial information” so that our products can win in the marketplace.
3. Foster Key Supplier Partnerships
There’s a variety of ways in which supply chain can positively impact the development of new products, beyond what something costs. It’s up to us supply chain professionals to help shape the early value-add narrative.
“Having an understanding of manufacturing capabilities is critical to every product development effort, but suppliers have comfort zones, so at times they might not want to take on additional early new product development involvement risk,” says Prince.
Early on, one of the biggest impacts we can make is to connect the right designer’s or engineer’s need with the right supplier that can fulfill it. Selectively tapping our massive networks and using our supplier relationships to get suppliers proactively involved early proves to be invaluable.
On average, designers and engineers can’t generate the same level of supplier support, as they aren’t the ones who write the checks; without early supply chain assistance, our team members can be forced to work solely with oversees suppliers that are unwilling to make upfront time investments. And the absence of supply chain involvement can mean longer lead times and less commercial flexibility.
Involving suppliers early in product development without suffering from burnout is one of the most highlighted challenges with bringing supply chain data into product development. Supply chain professionals should guide the messaging and expectations with suppliers early on because supplier fatigue in product development often stems from a lack of understanding of the total addressable market opportunity and planned production kickoff date. Certainly, these items are fluid early on, but taking the time to walk suppliers through the vision for the product and their potential role in its eventual launch requires only a small investment in time, yet could make a significant impact on the product’s success.
The concerns that involving suppliers early in new product development could cause risks because their unique approaches or proprietary designs are then baked into a product are largely overblown. In our experience the benefits far outweigh the risks when involving suppliers in product development.
Any risk can be addressed through active supply chain participation in the shaping of a product, but a deeper understanding of the key underlying components and technologies is needed. Supply chain can then flag any future commercial challenges brought about by the sole reliance on a unique input; this back and forth, when executed fluidly, will not only accelerate your timeline, but will help to avoid rework and delays later.
4. Act as a Trusted Commercial Adviser
Every organization, big or small, needs problem solvers. Put yourself and the supply chain profession in the position of trusted commercial adviser with your product development teams. We do this by quickly solving supply challenges for our product teams, though we understand that trust is earned over time. If you’re the head of a supply chain team, then you need to take an active role in co-developing your company’s future products.
Heads of design or engineering need to support supply chain by clearly communicating their needs so that we can generate the best results together. If, for example, a designer really wants to talk to a supplier about alternative plastic manufacturing processes, they’ll likely need a technical review with a supplier, not a detailed quote. Frequent updates with your team members and with suppliers will help ensure alignment and develop a common language over time between the design, engineering, and supply chain departments.
“Supply chain professionals should focus on teaching; educating us as designers on supplier technology and capabilities,” stresses Prince.
As we move toward more connected and complex products, we need to assume a greater role as the stewards of supply base knowledge. We should play the role of trusted commercial adviser to take solutions to our fellow designers and engineers.
Infuse Supply Chain Intelligence Earlier Today to Launch Better Products Tomorrow
There’s no better time than now to bring more supply chain data into your new product development process. Getting the designs and technologies right are both important, but if your product can’t be repeatedly manufactured and delivered at a quality and price point that satisfies your customers, then your product won’t reach its full potential.
“There’s still a bit of mystery between product development and supply chain since we’re not experts in each other’s fields. If we want to bridge that gap there should be more effort put into making connections and learning from one another,” says Prince.
The full end-to-end product commercialization process needs better understanding by all to reach our organizations’ full potential. Today, it’s not enough to simply know your role in the process and then throw your work over the wall to the next person.
We should put in the extra work to learn more about what our colleagues do on a deeper level, and we should better understand what we buy, how it works, and the nuances of the underlying technologies. But if we embrace the fact that our roles as supply chain professionals are growing, and shaping our companies’ future products, then immense commercial success awaits.