Role of product design in transforming supply chains

With the ever-changing world that is happening day in and day out with technological advancements and upgrades of product lines, there is a role in product design in transforming the supply chain. In ancient times, innovation would take longer lead times and after the design is finalized, organizations would start on the procurement of components to the development and manufacturing of the products. As a result, it would take a lot of time to create a new product or upgrade one or create a new version of the product. But at present, product innovation needs to be quick and into the market fast to beat the competition. But what is product innovation? It is not only the design but also the activities needed from the design phase to the deployment phase.

So, to achieve this, product design plays a big role in defining or aligning sourcing, procurement, transportation, and distribution processes. With customers increasingly demanding a greater variety of products at lower costs, design has become an important means by which companies can gain a competitive advantage in their supply chains. Organizations develop strategies to enable higher levels of responsiveness over a product lifecycle and improve resilience by concurrent engineering approaches. Some of the major risk mitigation strategies involve moving products quicker, reducing product development times, shorter planning cycles, in-house design, a balanced portfolio of products, etc. Procurement has a bigger role to play in the product development process proposing materials for new products and potential sourcing countries. Similarly, supply chain output drives capital expenditure into production & distribution capacities. And again, there is an optimized production cost, reduced time to market & increased customer satisfaction due to the involvement of design processes in the manufacturing processes. Customer feedback and alignment leads to the upgradation of long-running product portfolios. To do that, organizations start with designing from scratch and their accompanying supply chains that work in tandem. Product designing also has an impact on the standardization of product components & processes, packaging, and consolidation for shipment and storage.

Now the question that comes up is, which stage of product design is the supply chain involved and how? Product design mainly has four sections – conceptual design or high-level view, a physical design where prototypes are made, a detailed design where components are identified, selected, and tested, and a final design where assemblies are tested as per final product design. Supply chain teams get involved in the detailed design phases as the component’s identification and manufacturing processes start from there. It is also important to have customer-centricity in all the phases, as a small change can jeopardize the design and the product outcome. The process starts with a design requirement mapped to a function-structure analysis with relationships, and modular formulations and then integrates with the supply chain to choose the optimal solution.

Is it all good and smooth? No, not always. It too has its challenges – internally in terms of isolation of functions and generation of mutually inclusive benefits, and externally in terms of handshake with upstream suppliers or service providers for material or component sourcing, interactions with customers in terms of their requirement mapping, geographical distance with the suppliers, contract manufacturers and service providers and industrial espionage. But even with these challenges, organizations still need integration of product design with supply chain to become market leaders or achieve customer satisfaction.

We talked about how product design has a role in transforming supply chains and the challenges associated with it. At the end of it, I would like to call out some recommendations which would maximize the opportunities from it.

·       Develop a cross-functional supply chain approach by an increase in communication & visibility of critical data.

·       Increase collaboration thus reducing functional silos.

·       Increase in customer requirement understanding.

·       Increase supply chain responsiveness by integrating key suppliers in the process.

·       Reduction of risks by recognizing capabilities & capacities of supply chain organization.

·       Reduction of intellectual property risk and time to market

·       Co-locating supply chain partners for increased supply-demand visibility

I know that it is very essential for all organizations to engage in this as it brings in increased customer satisfaction, streamlined processes, reduced costs, and other risks associated with any of the supply chain processes involved. The level of involvement varies from organization to organization and also on the product – whether, new, advanced, or customer-specific.

Author Details

Arijit Pramanik

Arijit has 20+ years of consulting, project management, and pre-sales experience. His expertise includes Oracle Cloud as well as applications for supply chain management and procurement. He has vast implementation experience with global clients in North America, Europe, and Asia. He is the product owner and anchor for the Infosys Oracle Cloud’s Stratos Hi-tech solution. He is also an Oracle Panelist & Presenter for B-school and Lateral recruitments. He is a Thought leader in Oracle space having published multiple whitepapers in various forums.

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