Join Eddie Davila for an in-depth discussion in this video Understanding manufacturing and operations, part of Supply Chain Management Fundamentals.
- Even when you think you know what the customer wants, developing new products can be very difficult for any company. When I try to help executives focus on the key issues of new product development, I'll often play this game with them. First, I'll divide them up into small teams. I'll give them some computer paper and say, your task is to develop a paper airplane that will impress me. It must fly well and look good, based on what I think. I will give your plane what I deem a fair selling price. They then get about 10 to 15 minutes to develop their team's prototype, the paper airplane that will define their team.
Watching them develop the planes is very interesting. Not only is it fun to see adults make and throw paper airplanes all over the place, it's interesting to watch the different development methods the teams use. Teams typically fall into a few categories. Some try lots of designs until they find one they like. Some teams will have a master paper airplane builder that knows exactly which exotic plane should represent their team. Some will try a bunch of designs, look around the room, and try to copy some of the cool things they observe, and some just make the easiest plane possible and hope the session ends soon.
No matter what the process, planes then typically fall into three categories. First, some variation on the really simple plane that most of us have made since we were probably six or seven years old. Second, the amazing paper airplane that most of us will never learn to make. Third, let's call it an adult paper airplane. Nothing that requires an origami degree but definitely a cooler airplane than the ones we made as kids. So now, paper airplanes in hand, each team picks a test pilot.
They show me what the plane looks like. They then show me how the plane flies. The kid plane probably doesn't fly very well and looks very dull. I might give it a selling price of $5. The amazing paper airplane looks awesome and flies well too. I'll give that one a selling price of $15. Finally, the mid-level plane looks okay. Sometimes, these planes fly very well. Other times, they do not. To keep things simple, let's just say I value those at $10.
Now, design and marketing are behind us, and what's interesting is that the executives who play this game often don't realize they've even thought about design and marketing. Anyway, it's time to start the supply chain portion of the game, dealing with suppliers, manufacturing processes, labor, and quality. I give them all 20 pieces of paper and 10 minutes at a cost of $50. I say go, and I start a timer. The team with the simplest design, they make a bunch of planes that aren't worth very much.
The team with the average design, typically they make fewer planes, but their planes are worth much more. The team with the super-exotic, super-space-age paper airplane, well, they usually only have one person on the team that even knows how to make that plane. So, they will end up making only three or four planes in those 10 minutes, expensive planes but not very many of them. We add up the revenue from the good planes, subtract the $50 cost, and then we crown a winner.
As you'd probably imagine, there's a lot more drama to the game when you play it in the classroom, but the results I described are pretty typical. What have they learned? In the heat of the battle of a very fast-paced game, teams very often forget the bigger goals. When designing the plane, they forget someone will need to manufacture those planes. When they manufacture the planes, they very often forget about consistent quality. Often, I'll reject planes if they aren't up to the prototype standards. Another thing often happens.
Typically, someone will complain that I didn't explain the entire game at the beginning. They say, you only told us what we needed to do next. It's only when the game is done and the teams decompress they look back, and they realize how important communication is, how important it is to understand goals, and finally, how important it is to understand the connection between marketing, design, and supply chain management when developing a new product, or even improving an existing product.
Believe me, whenever a group of students or executives play this game, there are so many different lessons that are learned. So, perhaps you can go to the office today, get the workers away from their desks, and try playing this game. If not, I want you to think about what your company makes. Think about the performance and aesthetic elements of your product or service. Think about the design of the item, the parts that go into it, the way the product or service is created, and the required skill and training of employees.
Plus, also think about the insane pace at which they work, and then, think about how coordination and communication between marketing, design, and supply chain is the key to a better present and future for your company.
- What is supply chain management?
- Working with SCM in different industries
- Developing good relationships with buyers and suppliers
- Manufacturing products
- Delivering products
- Integrating the entire supply chain
- Creating ethical and sustainable supply chains