The competition to capture the attention of today’s consumers is fierce. In almost every consumer serving industry – including consumer goods, electronics, and automotive – manufacturers are struggling to win the interest and dollars of consumers. The reason? More competition.
The changing competitive landscape is putting intense pressure on manufacturers whose business models are designed around traditional retail sales, and whose executives are used to having outright control and influence over consumer and retail expectations for features, design, and pricing of products. They’ve established supply chains, sales channels, and product development cycles that fit their models; and designed their entire corporate infrastructure to support it. This model still succeeds in many product categories, but change is in the air.
In this article, we’ll discuss some of the challenges that manufacturers are facing today, and how technology can help address them.
If you’re a manufacturer that’s been around for a while, we’d encourage you to keep reading; especially if you’re trying to understand how digital transformation fits into all of this.
Shorter Product Development Cycles
The barrier to entry for many product categories has been lowered in recent years due to the growth in digital marketing and e-commerce. New upstarts can now launch a product on Kickstarter, expand through direct-to-consumer sales or marketplaces, then win coveted shelf space with major retailers after they’ve proven traction. The new product introduction path, once controlled by retailers and large manufacturers, is now more accessible to upstarts and outsiders that want to jump into the fray. Major retailers are taking notice of this successful strategy, and many have designed their own piloting models, utilizing marketplaces, e-commerce, and data analytics to predict successful products and decide allocation of shelf space for brick and mortar locations.
Established manufacturers have also taken notice of this trend. Many are being forced to increase investment in product innovation and reduce time to market, putting strain on product development teams, production centers, and supply chains. This type of change isn’t easy. Reducing the time from product development to new product introduction is a significant undertaking, especially for large manufacturers with global operations and supply chains. It’s a company-wide initiative that requires analysis and change of almost every facet of the business. Not impossible, but certainly challenging.
So, how can technology help manufacturers to reduce their product development cycle? Here are a couple of tips. First, design a product development model that integrates market feedback into product design. Digital customer engagement tools help product development teams collect and monitor customer feedback on brands and products, so they can make better predictions on whether products will be successful, and don’t waste production resources on mass-producing a dud. Second, design production centers and supply chains that allow for speed and flexibility. New product introduction teams can use manufacturing design and simulation software to design, test, and simulate new production lines and their impact on supply chains.