Talented product designers and engineers today do a wonderful job painstakingly uncovering customer needs by spending countless hours interviewing potential customers about their biggest pains. Tech entrepreneurs then successfully develop painkiller products that address these customers’ needs. However, from our experience, there is often a disconnect from the magic that happens early on in the customer discovery stage and the later product development process that can lead to customers’ needs going unfulfilled. The Startup Owner’s Manual by Steven Blank and Bob Dorf offers a wonderful guide for customer discovery legions of entrepreneurs have utilized to create successful products that address customer needs. We would advocate that all companies looking to bring to market hardware products, whether startup or established, follow this proven customer discovery process for testing their hypothesized market problem against potential target customers’ value of the problem and ultimate willingness to pay for a solution to the program ahead of starting into the product development process.
In our experience, once the value of addressing a market problem is confirmed, companies endeavoring to bring to market disruptive hardware products need to summarize customer needs early on in the product development process to determine how best a future state supply chain could address customer needs. Specifically, companies must understand how competitors’ supply chains operate and bring products to market. Understanding competitors’ supply chains can often unlock value creation opportunities for companies to address customer needs in new and creative ways. Further innovative companies must challenge themselves to look outside their own industries to understand how other leading companies are bringing to market disruptive products.
High growth hardware technology companies that successfully incorporate a disruptive supply chain model early on in the product development process to fully satisfy customers’ needs will ultimately launch disruptive products that capture market share quickly, generate profitable cash flow, and provide a sustainable competitive advantage. Customer needs can often be addressed through various supply chain features and benefits that support the fulfillment of customer needs.
Below is a 5 step process we utilize to define and incorporate customer needs into the supporting supply chain features and benefits early on in the product development process. Incorporating these supply chain features and benefits ultimately leads to the commercialization of disruptive products.
1. Interview Potential Customers
First, test your hypothesized target customer needs by interviewing potential target customers and identifying their supply chain needs. Specific key needs to understand are quality, price, options, customization, availability, and lead time. It is important to use non-leading questions during target customer interviews to attain key industry, non-industry, competitor, and product and service offerings that are failing, meeting, and exceeding customer needs. A customer might state that quality is the most important product feature, but in the next breath state that they will only pay $50, which results in a specific set of supply chain considerations such as manufacturing locations, processes, and suppliers that all need to be decided upon early in the product development process.
2. Benchmark Competitors
Second, conduct research to benchmark industry and non-industry world class supply chains to attain key product and service offerings that are failing, meeting, and exceeding customer needs. Exact competitor supply chain operations are often difficult to benchmark, but the end customer features and benefits that result from competitors’ supply chain operations are easier to benchmark. Companies must benchmark how disruptive products are brought to market outside their own industry and the supporting supply chain operations leveraged to create each feature and benefit. Competitors that offer a wide range of custom product options with a short delivery time might in fact have localized flexible manufacturing as part of their supply chain to facilitate customers needs for custom products fast.
3. Prioritize Customer Needs & Wants
Third, summarize answers, comments and suggestions with potential target customers to corroborate and refine hypothesized customer needs. It is then important to prioritize customer needs based on the number of mentions of specific needs and those needs that are not offered by your competitors. These unique potential customer needs not satisfied by your competitors offer a major opportunity to disrupt the market. In today’s hyper competitive consumer electronic sector, we have found that it is often the product services supported by a robust supply chain, such as product mix availability, that allows companies to scale quickly by having the right product at the right time.
4. Outline Your Differentiating Factors
Next, overlay a customer’s needs with competitive benchmarking to identify potential future state supply chain differentiating factors based on your prioritized customer needs. As an example, an online powersports service parts distributor could implement a haggle free return policy on all service parts to create a supply chain competitive, and ultimate business model, advantage that would allow it to compete against brick and motor service parts stores. Companies that want to create truly disruptive products must satisfy new white space customer needs in new and different ways in order to realize a sustainable competitive advantage.
5. Implement, Test & Improve
Lastly, companies that build-in customer needs early on into the product development process will ensure their products and their supporting supply chains are truly disruptive. Companies should consistently check in with customers to survey them to get a pulse on their needs and how competitors are addressing them. Currently, many customers are demanding a wide range of product feature customization not requested only a few years ago. Companies that identified this request early on are now benefiting from picking up on this trend several years ago. Those companies that evolve their supply chain operations to continuously meet customers evolving needs will continue to thrive and remain relevant in the rapidly evolving business climate of today.
We hope that implementing the above process for researching, defining, and building-in solutions for customer needs into your supply chain early on in the product development process will deliver superior value for your organization. We realize the above strategies will test your people and your organization, but our experience shows us that those leaders with the drive to follow this process to build a supply chain to addresses customer needs will position their company’s products to truly disrupt the market.