How to manage your supply chain for the ultimate product launch efficiency
Striking the perfect balance
Launching a new product onto the market brings challenges with it. The more innovative the product is, the less proven sales history there tends to be behind it. This makes planning the right quantity for manufacture rather difficult.
There is a balance to be struck between losing out on orders and reputation by running out of stock, and conserving cash-flow to ensure extra items are not stuck in a warehouse, tying up company finances. This is particularly important in fast moving markets where obsolescence of too much stock can lead to wastage, both financially and environmentally.
7 ways to customise your supply chain
Buy in key components
One way to combat stock shortage is to consider buying bare printed circuit boards (PCB’s) and key components in advance; thus reducing lead times and uncertainties for top up batches. This also minimises the initial outlay, when product sales volumes are uncertain.
By having the key components on hand it should be possible to buy more commonly available components on short lead times. PCBs can be populated quickly ready for a full box build and the product packaging.
Build Resell agreements with manufacturers
Work closely on your partnerships with suppliers and put clear agreements in place allowing unused component stocks to be resold. This will help cover you if the expected demand for your new technology is lower than expected. What’s more this allows you to be more ambitious with your marketing and sales strategy and projections with the knowledge a fall-back plan is in place.
Utilise batch quantities
Minimum Order Quantities are the norm when it comes to manufacture and are usually non-returnable. Components are often moisture sensitive which makes returning part used reels and trays impossible in most instances.
See what credit and stocking terms are available for component purchases. It may be possible to manufacture plastic enclosures in cost effective batches and then draw down batches as needed.
Look at longer term payment options
Electronics components can sometimes be supplied on long credit terms, 180 days or more might be achievable in the right circumstances. Any custom parts will have to be paid for at some point so this should be viewed more as a cash-flow option rather than an overall cost saving measure.
Flexibility provides a jump start option
Flexibility does add storage and handling costs but it can be a useful tool to manage cash-flow in the initial stages of a product launch.
Look at Lead Times
If a product has a long lead time, with the manufacturer, this also poses a risk as getting extra stock at short notice may be tricky. Always check the lead time includes the delivery time when shipping in components from over-seas. Potential customers could lose interest or a direct competitor could enter the market in a short time period, leaving you missing out on First Mover sales. Talk to your manufacturing partner about options to combat this.
Finally…Pay Close Attention
If you’ve done your market research and instigated a full awareness campaign and suitable buzz around your new product then this will help to minimise the damage from over ordering or stock shortages but always try not to over-commit.
To put together a more flexible supply chain, that can adapt fully to your changing needs, make sure you maintain a close watch on any changing factors. Keep an eye on your stock levels and plan ahead for lead times and any regular seasonal disruptions such as Christmas and Chinese New Year.
You must also be aware of changes in the marketplace. Changes in buyer behaviour can be brought on by a number of factors, stay ahead of any relevant news in your industry in both B2B or B2C markets and keep on adapting.
We hope you’ve found this article useful. Our engineering team are used to adapting products to help future-proof them against changes in the marketplace.
To discuss a design review or a new idea you’ve had speak to us today using our contact page.