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Manage unpredictable supply chains with innovation systems

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In the early days of the Covid pandemic last year, sudden shifts in consumer purchasing habits caused an unexpected demand for many goods. This resulted in significant supply chain disruptions and a lot of empty store shelves. While frustrating, it was easy for people to understand why a once-in-a-century global pandemic could create disruptions. Fast forward to the final few months of 2021. As Covid heads towards endemic and much of society has returned to normal activity, we see more news headlines about massive supply chain problems around the world and even some empty store shelves again.

There are a variety of angles to the supply chain crisis - from the initial stories of microprocessors being in short supply to the current headlines about container ships backed up in the ports of Los Angeles and Long Beach, to the sky-high increases in containers to a shortage of truck drivers to haul the freight. We’ve even seen stories about the ways that giant companies are using the supply chain crisis to their advantage over competitors.

At this point, four things seem certain:

  • It’s a global issue
  • Shortages continue across all products
  • Manufacturers of all sizes are feeling the impact
  • Price increases are inevitable.

Disruption and frustration are inevitable as there’s no way of knowing how long this situation will continue. Surrounded by this ball of confusion, it’s difficult for companies to forecast with any certainty when products will launch and what the cost and revenue projections will be.

Product managers, in particular, are really feeling the heat. They’re caught between the company’s revenue expectations and the ability of the organization to deliver products to buyers. Planning for any given product has suddenly changed from a one-time product definition (plus its market lifecycle) to a continuous, fluid product definition. It’s now imperative that organizations embrace cross-functional collaboration and take it to every corner of the enterprise.

Since product managers can’t resolve supply chain issues, they must take a bold and, for some, unprecedented step. They need to change product definitions, remove some features and add others. Product managers need to be more agile and creative than ever before. Build what you can and move forward aggressively.

It’s time for product refactoring

The term “product refactoring” may seem new, but we’ve been doing it all along. Companies refactor products all the time and they do it for both technical and commercial reasons. For example, if it becomes apparent during development that a feature isn’t cutting it technically, it’s removed from the product definition. At the other end of the life cycle, completed products are often tweaked based on early market testing or consumer evaluation.

Product managers can’t just guess. They need input and insights from sales (for potential product changes), engineering (for risks), manufacturing (for status) and the executive suite (for strategy and financial alignment).

Companies with regulated products that require long approval cycles face additional challenges. These products need to be rethought into a large, combined product that can gain approval and then potentially decomposed into products that don’t require re-approval because they have fewer capabilities. Regardless of the complexity of an organization’s product portfolio, companies must be more agile than ever with all the unknowns present in today’s supply chain situation.

A single source of truth is essential in the innovation process

Far too often, organizations make decisions based on incomplete information. Departments may not have a view of what others are doing in the enterprise. Individuals at multiple levels are making decisions in an uncoordinated fashion due to an inaccessible or inconsistent decision-making framework. Exacerbating the situation are the issues that arise when product development includes external partners. This approach is no longer defensible, if it ever was.

The most forward-thinking companies are deploying single innovation systems that are flexible, scalable and capable of integrating with any system or innovation process. These systems create a decision-making framework and single source of innovation truth that includes all levels of the organization. Product refactoring is far more likely to succeed when all stakeholders have a clear line of sight into activities, decisions and expectations. A single innovation system also promotes global adoption of standardized innovation best practices and ensures that consistent governance procedures are stringently enforced.

Having the ability to consistently innovate, develop and refine a successful portfolio of products has never been more important. It’ll enable organizations to navigate today’s supply chain problems and whatever thorny issues arise in the future.

For more information on Sopheon’s approach to delivering a single innovation system, please visit here.

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