Prime Advantage Blog

Procuring Elite Product Development

Dan Grant on Oct 8, 2015 12:55:59 PM

Your company has a great product idea, so now what? It’s time to get to work. But not just any kind of “work,” it’s time to get down to smart work. And one of the biggest keys to efficient and intelligent product development is involving your purchasing department, along with your suppliers, as early in the process as possible. This allows your team to benefit more fully from component specific knowledge as well as additional engineering feedback. Considerable savings can be realized by early discovery of what will go into construction, what materials are suitable and what your suppliers’ capabilities and core competencies are. You’ll gain a better understanding of what is and what’s not feasible, potentially saving you the time and money you’d have otherwise spent while veering down bumpy paths and dead ends.

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Procurement departments want to keep pace with the best of the best in manufacturing today, and they have an arsenal of supplier relationships that can benefit the entire organization. By placing a stronger emphasis on supplier quality and reliability, purchasing can better manage these relationships to keep a more macro-focus on company goals and long term success. Yes, you want to win the day. But if it’s at the expense of winning future days, then one day you’ll soon be left without days to win.

And it’s not just about keeping pace -- there are serious and detrimental ramifications to tunneled or delayed communication throughout the NPD process. In a quest for lean, product development inventory can be quite fat. The amount of work-in-process inventory you may be keeping on hand in your product development procedures is not nearly as obvious as what physically sits on your factory shelves. But it is just as much of a money-suck. The information, prototypes, tests and instructions, all being relayed during the engineering progression doesn’t show up on the financial statement, but it does show up in the state of your company’s finances. It’s an absolute must to communicate as efficiently and effectively in these stages as possible for the vitality of what you’re producing.

The world wants your product. To ensure you’re able to give them the best version for the longest duration possible, it’s imperative that you get procurement involved from the get-go. You need to revere quality and reliability as much as you value pricing. And remember just because you can’t see certain pieces of inventory, that doesn’t mean they can’t be weighing you down. Keep these principles in mind and you’ll be well on your way to giving the world not only the product it wants, but also the one it needs.

Download the 2015 Purchasing and Manufacturing Survey from Prime Advantage

Topics: Procurement

Dan Grant

Posted by Dan Grant

Daniel Grant is the President of Prime Advantage, a Chicago-based Group Purchasing Organization for mid-market manufacturers.

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