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Let’s give our new products a fair chance to succeed.
Progressive consumer companies launch a whole lot of new products every year. Empirical evidence, however, shows that most of these launches fail and have to be withdrawn.
Can we, as Supply Chain professionals, help improve their chances of success? Let’s put our heads together to see what could be done differently in managing their supply chains.
Leading consumer companies have a well-oiled and efficient supply chain, which helps in maintaining high availability of their current running products. Their supply chain has been honed over the years to sense the demand, set the inventory buffers appropriately, and replenish them frequently. The system, especially if it is demand driven, takes care of uncertainties in demand and supply.
Since it is a proven and well-running system, supply chain teams prefer using the same system for new product launches as well. Is it a wise thing to do?
New products generally have much higher levels of uncertainty in demand as well as in supplies. System which has worked in a relatively more certain context often fails to respond adequately to these uncertainties and breaks down. The evidence is higher levels of inventory mismatch. Stockouts increase, so do surplus inventory build-ups at certain nodes.
How do you think the supply chains should be tweaked for new product launches? What ae some of the actions you have implemented which have worked?
Let’s start a conversation here…