Dec 15 2011

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The Dilemma of Too Much Success with a New Product Introduction

Last month I wrote about the possibility of having a runaway product launch that totally exceeded your expectations. One of the examples I referenced was the recently launched Apple iPhone 4S that sold 1 million units on the first day of pre-orders, for a product that was reviewed by the analysts and media as a “ho hum” incremental improvement over the already strong selling predecessor model.

In this post, I thought it might be interesting to take a bit of a “deeper dive” into what some sensible steps are that you can take today to better prepare for an unexpected (but much hoped for) surge in demand for a new product.

To start, the need to operate as a “digital factory” is paramount. Paper-based systems won’t help you when change is rippling from your orders, through your suppliers and production schedules. Changes will occur frequently with new products, as you fine tune the offering for various end markets. These changes must occur on the fly, quickly and accurately for you to produce on-quality products efficiently.

Collaboration with Design and Manufacturing
The ability for engineering and manufacturing to effectively collaborate is made most apparent in the New Product Introduction (NPI) process. Delivering work instructions to operators, machine set-ups, quality specifications, engineering change orders and more to the shop floor must happen quickly and seamlessly to hit escalating production targets. Next, you need to deliver this information to multiple plants, which may include component suppliers, as well as your own plants that have varying equipment, tools and skills. Addressing these complexities ahead of time in a systemized way is a critical component to a successful launch. You must also keep in mind there will be continuous process improvements (Kaizen events in the Lean world), which will require further collaboration between manufacturing and engineering. Therefore, you need a process in place that includes how to communicate which processes are performing to target and which are not.

Supply Chain Visibility, Flexibility, and Collaboration
Many, if not most large OEMs today outsource some of their manufacturing processes. In industries such as consumer electronics, this could be as much as 100% of manufacturing. In many cases the design and quality testing processes are also outsourced. This means that much of the value an OEM brings to the supply chain, outside of the obvious value in being a brand owner, is the ability to effectively orchestrate the various components of a complex supply chain.

Orchestrating a supply chain that is rapidly changing because of a demand spike in a new product can be very challenging. To address these challenges, top manufacturers look to achieve real-time visibility into quality and inventory flow across their supply network. They also look to increase flexibility by using a portfolio approach to choosing suppliers. It is risky to allow any single supplier to take on too much work. Finally, the industry leaders invest in collaboration to ensure various tiers in the supply chain are coordinated across multiple disciplines like quality, engineering, manufacturing and distribution.

Closed Loop Quality Management
The final piece of the New Product Introduction puzzle, which is often overlooked until it is too late, is quality. Quality should be infused in every part of the manufacturing process, from design to simulation, manufacturing, distribution and even servicing the product. Product failure modes should be established at the outset. Statistical Process Control may be applied to key metrics in the production process to ensure a quality product is delivered. Feedback mechanisms for quality issues from customers and service partners should be established prior to the new product launch – each of which are capable of handling extreme spikes in usage – in order to implement a rapid response if an unexpected quality issue occurs as your product hits the market. Nothing will scuttle a new product launch like a quality issue going “viral”.

In closing, I hope these suggestions generate thoughtful insight into what can be done today to prepare for a sudden surge of orders. In the global, web-based economy in which we manufacturers operate, new product success can surprise even the best forecasters … it would be a shame to be fortunate enough to launch a high-demand product, only to fail on the execution.

Permanent link to this article: http://www.apriso.com/blog/2011/12/the-dilemma-of-too-much-success-with-a-new-product-introduction/


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