Product design and sourcing are traditionally separate activities, pursued sequentially. Designers set product and material specs, which procurement subsequently sends out to suppliers for competitive quotes. In contrast, this innovative DtV approach merges product design and sourcing into a single process, actively engaging your supplier ecosystem in unlocking fresh value in terms of cost reduction, sustainability, secure supply, and brand appeal.

Mounting challenges demand concurrent solutions

Why should you move beyond point solutions and traditional transformations to elevated, agile, and crowdsourced DtV? The challenges you face today demand concurrent solutions that gain much more ground, far faster.

Costs. Inflation has raised its fearsome head. Companies now face cost spikes across the supply chain, including wages (about 3 percent YoY), critical raw materials (for example, aluminum about 60 percent YoY; source: London Metal Exchange ticker: LMAHDY LME Comdty), and energy (for example, natural gas about 13 percent YoY). There is a clear and growing imperative to be more proactive in managing and containing costs.

Supply/demand uncertainty. Large portions of logistics capacity remain offline or impacted by COVID-19 restrictions, leading to longer lead times and extraordinary cost increases (for example, ocean +300 percent YoY), while rapidly shifting demand patterns create bullwhip effects, leading to frequent out of stocks and decreased service levels.

Sustainability. Long viewed primarily as a regulatory concern, sustainability has become a consumer hot button. Even highly respected companies find themselves pointedly challenged to do far more to safeguard and improve the environment. Of course, these same consumer sentiments infer opportunities to grow revenues and share. One study suggests about 74 percent of consumers are now willing to pay more for products with sustainable packaging.

An elevated, agile, and crowdsourced DtV approach simultaneously tackles all three challenges.

Elevated

The objectives are elevated, as this new kind of DtV program is meant to have lasting and measurable effect on your top-line as well as bottom-line performance, brand reputation, sustainability, and operational resilience.

The initiative is CXO-sponsored and jointly led by the chief marketing officer and chief supply chain officer, who are incentivized to promote full collaboration. The chief sustainability officer should also help shape the program, provide design input, and validate the sustainability baseline/benefits tracking methodologies. These top leaders, rather than middle management, personally communicate within the company and to strategic suppliers, ensuring that all program participants feel fully motivated and accountable for success.

Agile

This ambitious DtV program is deployed via an agile process in which innovative and imperfect ideas are promptly tested with suppliers and consumers. Scrums are rapidly repeated to iterate the final design.

Crowdsourced

In contrast to the customary siloed approach to product and package design, owned by NPD and marketing, this DtV program involves procurement, supply chain leaders, outside product and package design experts, technical services, and customer sentiment analysts from day one. The role of suppliers (new suppliers as well as incumbents) is particularly noteworthy, as the program offers them a prominent seat in the product design process.

Product teardowns

As illustrated in figure 2, our approach to DtV begins with competitive product teardowns―most often at one of Kearney’s PERLab studios in Chicago, Stuttgart, or Shanghai, although teardowns may also be done at your own sites or in the facilities of trusted suppliers. We involve trusted product and package design experts in these sessions, to blend their deep understanding of design choices with Kearney’s expertise in production and logistics.

Your industry

Your needs

About us

Careers

Insights

Your industry

About us

Careers

Insights