How to get a product out when the demand is hot
Creating supply chain optimization
By Fawn Fitter
Moving products from concept to customer faster than the competition overwhelms a lot of promising companies. In this article, we look at ways to create supply chain optimization in order to speed up your time to market.
In Summary:
| • | In order to create supply chain optimization, remove barriers like the lack of cooperation and collaboration among departments to improve speed to market. |
| • | Supply chain optimization takes research and development, which midsize companies in particular struggle to find. |
| • | Supply chain optimization requires changes in order to accelerate product development cycles, which means changes in corporate culture to support and facilitate these needs. |
Why does a new product fail? When supply chain advisory firm AMR Research asked manufacturers that question, the most common answer was "missed demand"—the inability to introduce a product fast enough to respond to a market trend.
 | Involving every department at every stage of product development accelerates time to market by keeping the entire company focused on the end result: a product that fits the overall goals of the business. |  | |
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Even the most revolutionary product or service will fail if customers have already found another solution to their needs, says Michael Burkett, vice president of product innovation at Boston-based AMR Research.
Generating great ideas is rarely a problem, but launching them in a timely way can be a challenge. Interdepartmental power struggles often block innovation, and poorly planned attempts to automate workflow can lead to delays and errors as employees misplace or cannot find critical data.
But when it comes to moving products quickly through development, midsize businesses do have an advantage over larger companies: With fewer employees, they often have a flatter management structure and more interaction among departments, and can respond more quickly to changing market conditions. Yet, according to Paul Maré, managing director of Fusion Factory Ltd., a South African technology consulting firm and a Microsoft partner, they tend to use all their available cash and capacity on current projects.
You need to make time to prioritize the pursuit of great ideas, even while managing your company's future cash-flow needs. If you optimize your research and development (R&D) cycle through better alignment among engineering, marketing, operations and finance, however, you should be able to innovate quickly enough to create and capture a market. As well, integrating productivity applications with your enterprise resource planning (ERP) and manufacturing systems can help organize and track projects through the cycle. "If [a midsize company] can shift resources quickly and balance between billable client work, necessary administrative tasks, brainstorming and R&D," Maré says, "then [it] will out-innovate the ones that can't walk the tightrope."
Breaking down interdepartmental barriers
For many companies, the first step toward supply chain optimization and improving speed to market is defining the processes and cultural attributes that allow the marketing and development teams to rally around a project. When veteran organizational consultant John Haskell notices a client is struggling to bring a product to market, he says it rarely matters whether the product development cycle is breaking down at the idea stage or in the last days before the launch. The problem is almost always the same: lack of communication and cooperation among business functions.
Sometimes this lack of communication is a deliberate ploy by managers who fear challenges to their status or decision-making power. They may talk about the need for innovation, Maré says, but in reality, their top priority is to maintain the status quo.
More typically, though, individuals and departments simply suffer from tunnel vision. "When people in one function think their part of the process is most important, they overdo their function or hang on to it too long, and the good idea never moves forward," says Haskell, a former assistant dean of the Whittemore School of Business and Economics at the University of New Hampshire.
For example, at one of his client companies, engineering managers insisted it was time to develop a new version of a popular product, but did not ask the marketing team for input until the end of the development cycle. When marketing was finally allowed to test the product, managers discovered that the people in the focus groups saw no significant difference between the new product and the old one. If only engineering had talked to marketing earlier in the process, Haskell contends, the company could have spent its time and money developing something with more potential.
It works both ways, Burkett adds. "Marketing defines a product based on what they think is needed, then they hand the document to engineering, which bases the design on their interpretation of the document, then engineering tosses it over the wall to manufacturing," he explains. At the end, like the children's game of telephone, what emerges is nothing like the original concept.
The solution, according to Burkett and Maré, is to institute cross-functional product development teams. A representative of every business function should participate in each phase of the process, from concept and feasibility studies to design, testing, and sales. Team members should meet regularly with the program manager to verify that everyone has signed off on each step before moving to the next one. This accelerates time to market by keeping the entire company focused on the end result: a product that fits the overall goals of the business.
Integrating applications to improve workflow
Technology alone will not streamline the product development process; in fact, it could slow things down. For example, a company may deploy an ERP solution, but if it is difficult to learn, poorly integrated with other systems, and drawing on data that IT has not cleaned up before importing, it will simply be a wasted investment.
More often, however, technology is the catalyst to getting products out faster, during the heat of the demand. For example, Fusion Factory recently provided a financial services company with an integrated business and financial management system based on Microsoft Dynamics solutions and accessible through Microsoft Office Outlook. Previously, the company would have needed several months to analyze past sales for patterns of use, but it can now report on customer transactions immediately. As a result, the client was able to conceptualize, develop and launch a new line of financial products in just four weeks, Maré says.
The right technology also can support the process of moving products through the development cycle by automating critical points in the workflow. By combining Microsoft Dynamics solutions, Microsoft SharePoint and Microsoft Office with third-party applications, your company can create tools such as these:
| • | Collaboration solutions such as virtual whiteboards and online conferencing applications speed the process by allowing team members to work together online. |
| • | An automated reporting system shows everyone involved in a project the active tasks and who is responsible for them, and whether the project has the appropriate approvals to move to the next stage. |
| • | A product data management system stores information about a product, from blueprints to marketing materials, and ensures only the most recent revisions are in circulation. |
No matter which department they work in, your employees' ultimate reason to increase speed to market is to give customers something they actually want to buy before someone else beats them to it.
Fawn Fitter is a freelance writer in San Francisco, specializing in business and technology. She has written for publications including Fortune Small Business, Worthwhile and Knowledge Management.
