Manufacturers of all sizes are consistently in a pursuit to bring new offerings for their customers. However, in a tightly competitive environment, it is important to understand the changing customer demands and dynamic markets to remain successful.
Even successful products fail more quickly today, as new entrants come in response to the dynamic and uncertain customer demands. It is no longer the time when we used to churn out value from our stock of valuable information gained over years of experience.
Advancements in technology and collaboration tools are increasingly establishing new business models that involve participants outside the organization through distributed product development to build practical and effective solutions that work in favor of the customer demands.
Organizations using these new business models involve suppliers, third parties and customers in the product development process to learn the market requirements faster and address the changing needs effectively.
Moreover, the knowledge developed through this collaboration lays foundation for future opportunities and innovation for everyone involved. With this approach, organizations are able to capture and share information across individuals profoundly and create superior value for their end customers.
Distributed Product Development Vs Traditional Outsourcing
The distributing product development is entirely different from the traditional product development approach. It focuses more on mobilizing and coordinating rather than managing and planning and encourages participation from diverse and specialized third parties. Through this approach, chances of innovation is more as diverse participants get involved in the development process as compared to conventional approach where only few R&D specialists are allowed to work for exclusive domain. By accessing key resources and distributing the problem among them through decentralization enables speed, accuracy and flexibility without capital investments.
The process of distributing product development might resemble with the traditional outsourcing relationships; but there is a key difference between the two. Outsourcing generally involves developing designs or assembling parts in a tightly structures arrangements with strict specifications and lengthy negotiations.
Distributed product development on the other hand creates different kinds of relationships altogether that often span a larger scope of company’s operations and are much more flexible in nature.
Adopting Distributed Product Development Successfully
The idea of distributed product development or open innovation might sound fascinating, but is equally complex and risky when different parts of the product development process is distributed among different companies. Product managers must clearly distinguish the processes that will sustain shareholder value. They also must identify activities that are non core and can be safely outsourced.
Once identified, there should be specific recommendations about how the process will work across internal and external organizational boundaries. Product managers must also encourage the company to invest in boundary-spanning capabilities through appropriate incentives, specifications, information systems, people and governance. Most importantly, DPD is a process that needs continuous improvement.
Organizations must be ready to adapt the changes as they come along and need to develop mechanisms to review, redefine and re-span organizational boundaries.
About Author: Gaurang Trivedi is Engineering consultant at TrueCADD. He has applied his engineering expertise across several highly complex and big scale projects, consequently managing to flawlessly deliver as per the client requirements.