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Three Simple Ways Supply Chain Can Advance Product Introduction

Tuesday June 26, 2018


Today’s organizations are increasingly recognizing the importance of cross-functional collaboration during product development. However, supply chain management professionals still are underrepresented in most strategic-planning efforts — even though they bear the responsibility of producing and delivering the resulting new products.  

So, how can the supply chain function contribute to the creation of impactful product strategies and sustainable business growth? Following are three ideas that you can implement right now to positively influence product development at your company:

  1. Demand a seat at the table. As previously stated, in the end, the execution responsibility is going to fall on you and your fellow supply chain management professionals once any new products are introduced. So, it’s only natural for you to be included in the planning process. Organizational resistance to such participation is an immediate red flag. After all, nobody is looking for the supply chain function to drive product strategy; but your perspectives are valuable and can help prevent making a decision that the business may regret in the future.

     

  2. Help strategic planners appreciate the hidden costs of stock-keeping unit proliferation. If the company is going to incur all of the costs and risks associated with supplying new products, it should ensure a good portion of these products provide true opportunities for growth instead of just replacing solutions that already exist. Certainly, replacement products often are critical for defending market share, but such efforts cannot consume the entire product strategy. A valuable line of inquiry from the supply chain perspective might look like this: “If we develop product A, we can expect to incur startup costs of B, and experience cannibalization of C sales. So, we’d need to acquire D sales from new customers. Is that possible, or might we better off focusing on a different product?”

     

  3. Go all in. Once the business decides collectively to pursue a true growth initiative via portfolio or market expansion, supply chain professionals must take full advantage of this exciting opportunity. Portfolio expansions can provide an opportunity to work with new suppliers, technologies and manufacturing methods. Market expansions can open up new distribution methods, packaging or value-added services. No matter the initiative, these are the inflection points for the company where your talents can be put to their best use.

New product introductions are a necessity for any business, but they create challenges for supply chain functions such as demand planning, sourcing, production and logistics. By increasing your involvement in choosing the right new products to develop, supply chain management professionals can exert greater influence on organizational outcomes and increase the probability that new products are rewarded with sustainable growth.

Dustin Levy will present “The Role that Operations Planning Can (and Should) Play in New Product Development” at APICS 2018 this October in Chicago. Learn more and register today at apicsconference.org.

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