Staying one step ahead of consumer buying behaviours has never been easy for manufacturers. Today’s consumers expect choice, and lots of it and products tailored to their lifestyle. And when it comes to meeting these evolving expectations, speed is vital. During the past five years, economic pressures, demographic shifts and developments in technology have all contributed in the creation of opportunities for smaller and more agile companies to disrupt the market with fresh concepts, increasing the pressure on larger manufacturing companies to rapidly launch new products.
Pressures of ever-changing market dynamics
In a recent survey, Winshuttle asked professionals from large manufacturers that use SAP ERP systems about the pressures and challenges involved when bringing a new product to market. The results showed that 74% of respondents are under pressure to speed up product launches. A further 67% of those surveyed said that competition is a key factor driving new products launches, while 82% claimed that the biggest pressure by far is the need to meet the preferences of their customers. And according to KPMG’s 2019 CEO survey global CEOs agree, with 67% believing that “Acting with agility is the new currency of business; if we are too slow, we will be bankrupt.”
Why are launch processes so slow?
How long does it typically take to collect the data needed to manufacture new products in SAP ERP? According to our 2019 survey, 70% of respondents reported six months or longer for a net-new product launch, with 29% taking more than 12 months. Why is this process so slow? First and foremost, there’s an enormous amount of data to collect, with materials being just the tip of the iceberg. Bills of material, routings, recipes, source lists, and many other data objects need to be touched as part of the manufacturing launch process.
Secondly, it’s complex, with processes and data varying by launch type, product line, brand, and region. Multiple departments, often eight or more, must contribute data, some of which is centralized and some that is plant specific.
And how is this data collected today? According to our survey, 60% of respondents use spreadsheets and email, and 17% use paper forms.
Volume, process complexity, and manual methods combined with market pressures have created a perfect storm for large manufacturers, compelling many to find a better way to handle their SAP launch processes.
Process optimization and automation aren’t easy or optional
The leading way our survey participants believed they could improve their product launch processes was to streamline their existing manual processes, followed by automating data collection and entry into their systems. We’ve seen first-hand the dramatic impact that process optimization and digitization can have on SAP launch processes, with customers reducing launch cycles by 50%, and much more in some cases.
As with any successful business transformation project, the mantra of “first optimize, then digitize” holds for re-engineering product launch processes — and this is a big undertaking for large manufacturers, one that involves executive sponsorship, cross-functional collaboration, and lots of change management. But as the data from multiple sources shows, being slow in today’s market is no longer an option.
To get Winshuttle’s full survey report, and to find out how to transform your SAP product launch processes, visit winshuttle.com/npi.