3 Key Takeaways From The Lifecycle Insights NPI and Sourcing Webinar

In 2021, we partnered with Lifecycle Insights to conduct an NPI and sourcing survey of global manufacturing leaders, to discover where digital transformation initiatives are resulting in successful new product launches. The survey scope covered 250 product design, engineering, manufacturing, and supply chain professionals across verticals like consumer electronics, industrial equipment, automotive, and telecom.

Organizations who participated range from $750 million to $2 billion in annual revenue. As part of the study findings, we produced a series of articles in partnership with Lifecycle Insights that delve deeper into the results from North America.

In early December of 2021, we also produced a webinar that brought Supplyframe CMO Richard Barnett and Lifecycle Insights CEO Chad Jackson together to discuss their impressions on the survey results, and preview upcoming findings from an extension of the survey into the EU and DACH regions. 

Join us as we look at three key takeaways from this insightful discussion, and discover what leaders in the industry are doing that result in more successful product launches when compared to their peers. 

3 Key Highlights From The NPI and Sourcing Study Webinar

As part of the discussion between our hosts, the recent webinar delved into data surrounding both new product introductions and how manufacturers are working through ongoing challenges in the current market. Among the respondents were over 250 product design, engineering, manufacturing, and supply chain professionals. 

Results come from a variety of verticals in global electronics. Consumer electronics, industrial equipment, automotive, and telecom to name a few. One of the immediate takeaways from the study is that digital transformation initiatives play a key role in successful product launches: 

“Manufacturers face unprecedented challenges due to today’s supply chain shortages, product complexity, and competitive pressures. As our research shows, manufacturing leaders are investing in digital transformation initiatives to ensure resiliency at the point of design – rather than attempting to mitigate risk after their products have gone to market.” 

Richard Barnett, CMO, Supplyframe 

The most successful organizations are the furthest along in their digital transformation journey. Furthermore, leaders are prioritizing cross-functional collaboration, more effective cost and risk analysis, and conducting exhaustive BOM trade studies. 

Let’s take a look at three takeaways from the webinar that highlight opportunities for manufacturers looking to enhance and improve their new product introduction strategy. 

1) Product Complexity is Increasing Exponentially Across the Industry

It’s no secret that modern electronics and products that include electronic components are increasing in their complexity. As technology marches forward, the need for more chips, more processing power, and more capabilities only rise as time goes on.

However, one aspect of the survey data that stood out to Supplyframe CMO Richard Barnett, was the fact that a significant number of respondents (28%) reported an increase of over 50% in the number of components per product, compared to the prior generation of their design. 

Consider these other findings as well: 

• 94% saw an increase in the number of indented levels within a single BOM 
• 88% described an increase in the number of sensors per product
• 91% of respondents saw an increase in the number of companies supplying components per product

This, and other data surrounding product complexity during the webinar is significant because it highlights the need for better management in product complexity, but also more agility and speed in supply chains to support the rise in component demand from modern designs.

“Our view is that every time we launch or design a new product, there’s a new supply chain that comes with that new product. The fact that you’re seeing the complexity reflected in the number of suppliers doesn’t surprise you, logically, but how high it is self-reported here was significant in terms of the study results for us.”

Richard Barnett, CMO, Supplyframe

2) We are Within a ‘Perfect Storm’ of Challenges

Another set of data discussed during the webinar asked respondents to rank their top three factors that are pressuring them to improve how they develop products and analyze BOMs across the product lifecycle. This type of question is designed, in theory, to highlight a cluster of responses that pinpoint a generally universal challenge the industry is facing.

This, however, was not the case when the data came back. Instead, respondents ranked the list of challenges almost evenly across the board, showing a wide range of issues that impact almost everyone in the industry: 

• 12% cited supply chain disruption or complexity as their most pressing challenge
• 13% view supply chain volatility, shortages, and life cycle sourcing viability as their main concern 
• 16% are most focused on competitive pressure and the need for technological advancements or features
• 15% claim that shortening or lengthening product life cycles are the most pressing issue. 

Other results pointed to things like regulatory requirements or incentives (8%), or the transition to a product platform and modular strategy (13%), but as shown here, the industry cannot universally agree on a single challenge that’s driving the need for change. 

This illustrates the level of uncertainty and risk in the NPI process, and further highlights the need for a comprehensive approach that takes the entire product life cycle into account during the design process. 

“What I found really interesting is that there was no dominant issue, and depending on where you are, what industry you’re in, and what product you’re making, you’re going to feel one more acutely than another, and that’s played out in these findings.”

Chad Jackson, CEO and Chief Analyst at Lifecycle Insights

In response to the data, Barnett referred to the situation as a “perfect storm of challenges,” which is an apt description of the data on display during this portion of the webinar. Everyone in the industry seems to be willing to acknowledge that these issues are impacting them.

One thing Supplyframe customers often cite as a challenge for them, is making the case for change within the organization. The widespread list of challenges and the evenly distributed nature of the results both point to several compelling cases for organizations to make a change and pursue digital transformation initiatives.

Supplyframe’s NPI and DirectSource solutions are designed to lock in resiliency both at the point of design, and further into the product life cycle. Our real-time intelligence and powerful cost and risk analysis capabilities offer a foundation for digital transformation in new product introductions with Supplyframe NPI, and certainty into the future through our DirectSource solution. 

3) The Most Progressive Organizations Still Have Room to Improve

As part of the study findings, Lifecycle Insights internally awarded certain organizations a number of points based on their answers. More mature or progressive selections would place them in a higher category as part of an industry-wide benchmark assessment.

The top 30% were labeled the “most progressive” while the others fell into the “moderately progressive” or “least progressive” category. Looking at this data, we saw a gap of almost 20% between the most and least progressive organizations across launching products on time and meeting success criteria, pointing to the benefits of companies who are further along in their digital transformation journey.

Perhaps the most shocking aspect of this data, however, is that the highest performing organizations are only launching 54.9% of their products on time, and among those, only 54.6% meet all success criteria. For the top organizations to only sit at roughly 55%, it shows a massive opportunity for improvement in even the most progressive of industry leaders.

The study also revealed that the most successful organizations are well into their digital transformation journey: 

• A mere 1.9% of the most progressive organizations consider themselves in the “planning stage” of their digital transformation. 
• 25% of the most successful teams report that they are “midway to completion” 
• 42% of leading organizations believe they have fully adopted their digital transformation strategy. 

Furthermore, another set of findings revealed that the most progressive organizations treat their digital transformation initiatives as an ongoing mindset (17.3% of respondents) that doesn’t have a fixed completion date. 

In light of current and future challenges, this approach will help the leaders rise above the rest of the pack.

“The organizations with the most mature mindset do some heavy lifting for standardization and tool enablement, but their performance improvement initiatives and how they want to get better is a continuously learning and constantly evolving mindset that I think is absolutely critical.”

Richard Barnett, CMO, Supplyframe

Achieving Excellence in NPI and Sourcing: What are Leaders Doing to Succeed? 

During the closing segment of the webinar, both Barnett and Jackson share some of their takeaways for leaders in global electronics. Jackson suggests that organizations recognize the value of cross-functional involvement and the ability to make more informed decisions based on outside-in intelligence. 

Our findings showed that the most progressive organizations incorporate an NPI project lead, program manager, product engineer, component engineer, sourcing or procurement professional, and finance or accounting representative as the top roles incorporated into the NPI process. 

Barnett recommends that leaders understand both the full portfolio of initiatives underway, and also the challenges that make the case for further improvement. In this regard, our findings showed that digital transformation efforts were most effective in the following areas: 

• Technical validation of BOMs
• Trade-off decisions to target cost and risk 
• Long-term NPI sourcing viability 
• Design for manufacturing
• Ramp to volume 

Click below to watch the full webinar, and for more information on how Supplyframe helps organizations enhance and transform their new product introductions, learn more about Supplyframe NPI today!