Large industrial product suppliers sell what they make. These companies became large because they provided equipment that many customers found useful. But as manufacturers become large, they also become bureaucratic. Ironically, new product development, the source of the company’s success in the beginning, becomes overwhelmed with complexity that causes lead time to market to expand to years.
Product development involves teams of engineers and product marketing managers. The decision making process to decide what new product project or feature requires 6 months to a year. Once approved the initial engineering and prototyping process can begin. With any luck it’s a year to first prototype, then there’s the focus group, engineering revision, qualification for manufacturing, agency certification which can take six months to a year on its own. You get the idea.
On the opposite side is the customer. The world of manufacturing is changing rapidly. The Industrial Internet of Things is a major force of change as it introduces inexpensive communications capability that can network and report data on operations to authorized users anywhere and at anytime. In the presence of this capability, customers are finding important ways to exploit hardware and software technology to add value to their operations. This requires suppliers of control technology to update products to make their products easier to implement.
This presents a problem for companies that supply control technology to the industrial world. Based on the model presented earlier, the cost of new product development is extremely high which creates a barrier to updating.
All of which creates a difficult situation. In the controls field, revenue is the result of new products, products that are innovative, that reflect the emerging needs of the marketplace.
The point of the maker movement is to reduce barriers to implementing new products. Similarly the controls world needs to undergo massive change that is beginning to take place. Sensor vendors, for example, have begun updating their products to include wireless networks of various types.
Part of the challenge is creating the right strategy for developing new products. One element of a successful strategy will be segmentation. Segmentation is required in order to address particular markets, but segmentation can also be used as a means of facilitating to the development process itself. Many products can be divided up into incremental steps that involve lower complexity and shorter development cycles.
In order for industry to reinvent itself a lot of things have to change. The biggest challenge is how quickly it need to get done.