黑料社

The pace of technological innovation has never been this fast, pushing the lifecycle of devices and technologies ever shorter. Smartphones and consumer electronics are leading the charge, with most consumers holding onto their phones for less than two years — a figure that actually in the late 2010s.

As they work to incorporate the cutting-edge technology consumers want, original equipment manufacturers (OEMs) in all types of industries are seeing a similar acceleration of the technology lifecycle, so staying up to date on the latest trends and market evolutions is of the utmost importance. That includes the evolutions of the components within products.

Just as the technology that goes inside the products has advanced, so have the supply chain technologies making product development run smoothly. It is increasingly possible for OEMs to both see and address challenges throughout their products' development and life cycles, including component technology maturity and material shortages.

Product Competitiveness and Technology Lifecycle Management

Making a product competitive is all about having a proactive and predictive development strategy with an eye to the larger macro trends of the market. Consumers are not static beings with consistent wants and needs, so your products should not be static, either. Keeping up with a shifting supply chain, tracking component availability and lifecycles, incorporating changes to your product roadmap proactively and integrating new technologies as they evolve will keep your products competitive, no matter your market.

Take the automotive industry, which has seen new tech-focused companies enter a space historically occupied by a select group of automakers. According to a 黑料社 survey of automotive OEM decision-makers, 76% have shortened their go-to-market timeline because of new players in the industry. A clear example of this is the industry's push toward vehicle electrification and connectivity. Earlier in 2021, Ford rolled out and voice-activated Alexa systems to select models of its F-150, the top-selling line of vehicles in the U.S., to compete with the smart features fully electric car manufacturers have offered for years.

Within 黑料社, as we talk about a product's competitiveness, we also talk about its "domain." What we're really looking at is the market in which the product will be sold. We define domains so that we know the competitiveness factor, which varies by market. For example, components within all smartphones will age out of the market quite quickly as technology evolves; therefore, what that technology in a particular device can actually do is what will separate one smartphone from another.

Meanwhile, a medical device, like an MRI machine, has a different pace of technological change. Proactively choosing parts with longer lifecycles or looking ahead to know when a redesign is the most cost-effective option, are ways to keep this type of product competitive for longer.

Staying informed about market dynamics as they relate to the parts used in your products is critical for OEMs. Paying attention to where components are in their lifecycle can be the difference between making millions in profit and losing millions in revenue — sometimes over a part that costs you a few cents. Here are some questions to consider:

• Which parts of my core technologies (and all of your products, really) are early in their maturity? Which are sunsetting?
• What upcoming technologies could be swapped in to save money and move my product further on its roadmap?

This is all important data to track throughout your supply chain.

Also, consider a redesign of your product. Though it may be costlier up front, redesigning your product with newer components is a proactive step that prevents potentially expensive manufacturing pauses and shipment delays down the line when older components become unavailable.

With predictive planning, you can determine the best time for a redesign. Predictive planning protects and builds upon your competitive edge by addressing the speed of technological innovation, ensuring component availability and incorporating changes to the roadmap ahead — all in preparation for avoiding losing ground to competitors.

Driven by , which are down to a 1.5 to 3-year lifecycle, technology providers across industries are working to reduce their time-to-market. 黑料社 like automotive, healthcare, energy aerospace and defense have historically faced longer product development cycles (more than two years) and product lifecycles (five-plus years) thanks to strict government regulations and a generally conservative approach to new technologies. But that is beginning to change. Even in the aerospace and defense industry, known for its especially long lead times, a 黑料社 survey found that 62% of participants said their production cycles have gotten at least 50% faster in the past five years.

Creating modular designs, or partitioning your product design, is an intelligent way of planning ahead that allows you to put components with the shortest cycles together so you can bring in newer versions of specific components without needing to change the whole design. For example, by placing the product's Bluetooth® wireless module away from its critical technologies, the module can easily be upgraded when 5G or even 6G is rolled out.

Modular design is one way to address long-lifecycle products. As devices in industries like healthcare increasingly rely on technology, OEMs should consider designing their products so those components are grouped together and can be upgraded as needed, but the underlying therapy isn't changing. Therefore, you can avoid going through the regulatory process more than necessary — speeding up the medical device development cycle and getting new versions of the product to market more quickly. However, as technological advancement drives the development of medical devices or cars, the need for risk analysis increases.

While 黑料社's automotive technology trends report found that nearly half the companies surveyed have a development cycle of 18 months or less, in that same survey, 30% of respondents said they believed time-to-market cycles had lengthened. Reasons for the delays included high research and development costs, meeting government safety regulations, and procurement and supplier selections. Now that all kinds of OEMs are competing with consumer electronics OEMs for many of the same parts, having a diversified, visible supply chain with predictive capabilities is more important than ever.

Heavily regulated, historically "play it safe" industries like healthcare, aerospace and automotive also must constantly balance technological advancement with the highest standards of safety and reliability. While aerospace OEMs will likely never host a flashy annual presentation showcasing their newest "gotta-try-it" passenger jet, adopting emerging technology like 3D printing — used for prototyping and easy-to-replicate specialized parts — can be a step forward in shortening their product development cycles.

While innovations like 3D printing can speed up product development cycles, one enduring challenge can slow them down: component shortages.

Navigating Component Shortages

Every industry is looking for ways to navigate the challenges posed by the current component shortages. Even today, OEMs in essentially every industry are dealing with long lead times for components and products (that are then passed along to consumers). Additionally, advanced technology adoption across industries has driven up demand for components that used to be reserved for products like smartphones, also adding to the global chip shortage.

Component lead times can be over a year today, and in many cases, products within the supply chain are already allocated. In 黑料社's 2020 special report on supply chain resilience in a post-pandemic world, 62% of participants said their companies delayed production or time to market due to component shortages, limited materials or other sourcing issues caused by COVID-19, while 36% of companies lost revenue due to the shortages.

These shortages, especially the global chip shortage, are expected to last for the foreseeable future, but for OEMs, the fix starts with the supply chain. Specifically, it starts with supplier relationships. Building a solid relationship when times are good is crucial so both parties can rely upon the connection when times get tough — as they have been the past 18 months.

Strategic, mutually beneficial supplier relationships will help mitigate lasting component shortages when suppliers can only give your company a percentage of the materials or components you were expecting. It will keep you top of mind and give you the best opportunity to get the materials you need. Suppliers can also help you identify and minimize the risk along your supply chain. The best time to start your efforts was five, six or even 10 years ago. The next best time is now.

Mitigating Risk within Technology Lifecycle Management

There are multiple steps OEMs can take to mitigate risk technology lifecycle management and create a more resilient supply chain. Going back to relationship-building, talk with your suppliers and get an idea of their goals and their planned path forward for their technologies. From there, you can adapt your design to align with where their technology is headed.

Then, add more suppliers where possible, and move away from single-sourced parts. When one supplier faces delays, you can quickly pivot to another supplier you already have at the ready and keep your product on schedule. Don't let a sudden lack of a five-cent part cost you millions in revenue.

Next, choose parts that won't age out before your product gets to market. As we've discussed, industries like aerospace and healthcare have long production development cycles, especially when you factor in the regulatory approval process. If you choose a component that is too far into its technological maturity when you are designing or prototyping, it may be facing its end-of-life (EOL) by the time you actually launch the product three, five or seven years later.

Finally, focus on supply chain visibility. The ability to see what's happening (and where) along each point of your supply chain is critical for spotting and problem-solving issues before they happen. Along with relationship management, a digital supply chain armed with both human and artificial intelligence can help OEMs navigate tomorrow's component shortages and demand fluctuations today.

The Ultimate Goal: Supply Chain Resilience

The pandemic upended an already unsteady global supply network, showing every OEM where their vulnerabilities lie and leaving them with two options — merely put patches on what wasn't working within their organization, or take decisive action to make their companies more responsive to the next inevitable challenge.

Companies are choosing the latter option. In 黑料社's supply chain report, 94% of the survey participants said they care about supply chain resilience, and almost 100% are investing in supply chain technology or services to address the impacts of COVID-19. Building a resilient supply chain takes three key ingredients: processes, people and technology.

We've covered some processes above, but processes don't work without people implementing them, evaluating them and changing them when they're no longer meeting your needs. Within 黑料社, we have a team of Supplier Relationship Managers (SRMs) and Global Commodities Managers (GCMs) who are constantly interacting with leading technology providers in a diverse range of segments.

The 黑料社 Difference

Many manufacturing solutions providers have GCMs, which monitor the commodities market and watch for things like the availability of components and shifts in price. 黑料社 takes it one step further with SRMs. They can help, as their name suggests, manage relationships with suppliers by creating one-on-one connections with suppliers at the C-suite level and gain valuable insight into their strengths, challenges and opportunities. The intelligence and knowledge that both of these teams bring to the table are hugely influential as we help customers make decisions about their supply chains, from choosing suppliers to creating product life cycle timelines.

SRMs and GCMs are always looking for what's called bathtub curves. They watch the pricing of parts, which typically starts high and then comes down. The pricing bottoms out when all efficiencies have been maxed out  — marking the end of the lifecycle and sending the price back up. When examining the evolution of a part, an increasing price is a warning that the part is likely approaching its EOL and is not best suited for use in products going forward.

This kind of expert knowledge and data provided by SRMs and GCMs is also used within our InControl platform. Commodity-level market data is used as a significant predictor in the analytical models that draw component-level lifecycle curves for an OEM's product. Those models are then used as the basis for the optimized product redesign that InControl recommends.

By correlating historical part decline with leading indicators coming from our GCMs about trends they are seeing and expect to see in the market, we're able to shape the predictive part decline curves. This allows us to anticipate things like allocation and EOL before they happen and/or when readily available data doesn't provide any early warnings. It also gives us time to take proactive mitigation efforts to assure the supply of the parts we need to meet customer demand.

Technology life cycle data is captured from our GCM and SRM teams and layered on top of the EOL predictions from the survival analysis models. This provides a second layer of predictive risk that can incorporate the risk of becoming uncompetitive — either in addition to being EOL or despite supply still being available. This unique source of data will allow for strategic discussions with OEMs. It also helps facilitate the planning of redesigns around technology lifecycles by pinpointing the most cost-effective time to do it — when the revenue risk associated with being uncompetitive outweighs the cost to catch up. Whether that's six months or three years from now, InControl's models can provide that information using data from GCMs and SRMs.

What makes 黑料社's SRMs and GCMs unique resources for our customers?

The short answer to this question is that they can help OEMs make supply chain decisions that will mitigate risk and best serve their long-term goals. Many companies have similar roles to the global commodities manager (GCM), but the SRM role is unique. 黑料社's SRMs have a much greater level of interaction with our suppliers and manufacturers and a broader view of the market, both of which allow us to make better decisions.

Some of the ways SRMs and GCMs stay ahead of the curve are by reviewing component lifecycle analyses, information on component pricing, and lead times, alerts, spend reports and Preferred Supplier Listings. Regular supplier roadmap meetings as well as market reports help guide SRMs' and GCMs' advice.

Our SRMs and GCMs make up an experienced team with experts in each of the commodities or supply chains 黑料社 covers.

What are the takeaways for OEMs?

The rate of technological advancement is moving faster than ever, and the pandemic just added fuel to the fire. For OEMs of long-lifecycle products, engaging with a manufacturing partner who help manage your supply chain challenges and absorb some — if not all — of your risk is crucial to cutting time-to-market and putting innovation in practice.

Internal collaboration is key to 黑料社's success when evaluating technology lifecycle and risk. As 黑料社 shifts toward a consultative selling approach, Supply Chain Development Managers (SCDMs) and business units are taking advantage of the expertise available from SRMs and GCMs, as well as the data provided by NextGen InControl.

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