At Kearney’s recent Product Excellence and Renewal Lab (PERLab) annual Future of Design conference, Robert Brunner, founder and partner of Ammunition, said, “What sets apart a great design from a good design is its ability to be manufactured.”
We asked experts at the conference about how product-design decisions taken at their firms have impacted their supply chain ecosystems. There was broad consensus about the need to integrate product-design principles right at the beginning of the supply chain. — often years before a product hits the market. Product design was compared to a situation in which one thinks of preparing a sumptuous meal, but not without thinking about the ingredients and their provenance first.
By integrating product design and supply chain functions early, at the conception of an idea, companies can optimize production costs, reduce time to market, and increase customer satisfaction. Successful product design can solve a host of seemingly unrelated problems, including supply chain issues.
Design for Manufacturing
Design for manufacturing can contribute to increased efficiencies, higher speed of production, and improved customer trust in product availability and use. Studies suggest that up to 70% of the cost of goods contributing to a product is determined at the development and design stage. Factors include the number of materials and components, geographic location of suppliers, lead time of materials, standardization of components across the product portfolio, and physical attributes.
Supply chain resilience is a cross-functional concept. Staying power, affordability and sustainability — all aspects of resilience — need to be factored into design so that retailers can keep SKUs on the shelf. This can be achieved by building products that are modular enough to showcase resilience even when there's a global supply chain crisis, or when an individual supplier is facing challenges or has gone belly-up. There's no point in generating demand if you can’t service it and ensure continuity of supply.
As the old adage goes, Show, Don’t Tell. Look for minor victories and make them into teachable moments. Kinks in a supply chain are never ironed out by some higher-up dropping a plan on the table, believing they’ve magically produced the best end-to-end system. Improvement comes from building on past failures, and that requires bold thinking from both product companies and supply chains.
As businesses evolve, it’s of utmost importance that companies break the culture of teams working in silos, and collaborate cross-organizationally during the conceptualization phase. All too often, supply chain and procurement teams aren’t engaged during the early stages of product design, while designers fail to take into account the availability of needed materials or components. Companies must also engage marketing, procurement, finance and other teams throughout the process.
New solutions require creative thinking. Supply chain personnel can collaborate with product designers to invoke experimental thinking. People from diverse backgrounds and disciplines can spur out-of-the-box conversations that challenge conventional supply chain wisdom. In the process, designers and supply chain personnel can get a more complete view of the problem.
Focus on the Consumer
Technological innovations have brought about a paradigm shift in the way that businesses operate. New tools allow for the creation of more sustainable and resilient products in response to evolving customer requirements.
Designers start by asking a few basic questions about what the customer needs and, more importantly, what led to that need. During the COVID-19 pandemic, for instance, businesses had to reimagine their existing capabilities in order to ensure that product was still making it onto the shelf. Many innovative products were being locally built. When a crisis such as the pandemic reaches global scale, companies face the common challenge of meeting customer demands for service while operating under severe constraints. The solution lies in cross-functional collaboration, which becomes permanently integrated into the DNA of the business.
Customer centricity inevitably leads to the transformation of longstanding product portfolios. In restructuring from the ground up, organizations find themselves working with a clean slate, designing from scratch products and their accompanying supply chains that work in tandem.
In the modern-day world of global supply chains, the concept of “survival of the fittest” has never been more apt. By building fitter business ecosystems, companies can give birth to the fittest products.
Bharat Kapoor is a partner and global lead at Kearney’s Product Excellence and Renewal Lab (PERLab). Suketu Gandhi is a partner and global co-lead of strategic operations at Kearney.
Timely, incisive articles delivered directly to your inbox.