It seems like every time I’m in my local cell phone store, the walls are covered with different phones than were there my last visit a few months before. The pace of new product innovation (NPI) is astonishing, and no doubt in part reflects what has rapidly become a “culture of the new.” What once was the domain of the fashion industry is now the concern of every industry. But for companies, what is the real value in today’s faster new product development?
A survey of chief supply chain officers by SCM World gauged how much value a high-performing supply chain could generate in terms of new product introduction. Four sectors were surveyed: hi-tech, consumer goods/retail, industrial, and health care/pharmaceutical. The results were interesting:
The nature of value generated by NPI was assessed across the groups based on four types of value: top-line results, bottom-line results (i.e., cost savings), compliance with regulations and strategy, and “soft value,” such as PR and better supplier relations. Here’s how the sectors saw value generated:
|PERCEIVED VALUE OF PRODUCT INNOVATION||Hi-Tech||Consumer Goods & Retail||Industrial||Health Care/Pharmaceutical|
|Top-line results||47 percent||40 percent||46 percent||22 percent|
|Bottom-line results||36 percent||31 percent||26 percent||26 percent|
|Compliance with regulations and strategy||34 percent||31 percent||32 percent||37 percent|
|Soft value||26 percent||37 percent||32 percent||44 percent|
In an e-book by Bob Ferrari, managing director of the Ferrari Consulting and Research Group, the case is made for tight integration of NPI and supply chain management. It’s well worth reading, particularly as this is a development we’re likely to see across all commercial sectors—sooner rather than later.