My nerdyness when it comes to interesting business principles apparently knows no bounds. My Wife and I were shopping for some last minute art supplies to finish our daughter's Halloween costume and passed by a rack of multi-colored pipe cleaners.
I paused for a minute, and turned to my Wife:
Me:"Pipe cleaners must be the most under-appreciated story of innovation ever."
Her:"What? Why?"
Me: "They were a product designed for a singular purpose and as the market for that purpose was declining, someone decided that they would make good art supplies for kids. I would love to see the statistics on whether they sell more pipe cleaners now than they did when pipes were popular. I would bet they sell more now."
Her: "Uh huh. Sure. Why not."
And still she loves me. Anyway, pipe cleaners have succeeded in a transition where so many products fail and become obsolete. Whether it was a shrewd marketing move or happenstance, it is still a model situation that can provide lessons for our organizations:
Me:"Pipe cleaners must be the most under-appreciated story of innovation ever."
Her:"What? Why?"
Me: "They were a product designed for a singular purpose and as the market for that purpose was declining, someone decided that they would make good art supplies for kids. I would love to see the statistics on whether they sell more pipe cleaners now than they did when pipes were popular. I would bet they sell more now."
Her: "Uh huh. Sure. Why not."
And still she loves me. Anyway, pipe cleaners have succeeded in a transition where so many products fail and become obsolete. Whether it was a shrewd marketing move or happenstance, it is still a model situation that can provide lessons for our organizations:
Every product runs a life cycle that can span days, weeks, months, years, or decades, but the ultimate success of a product is whether it can continue to relevant after it's peak in popularity. Why would a supply chain management professional care about the term of a product's life cycle? Simple. New products create disturbances in existing supply chains. If we are to rely on Wikipedia.com for our understanding of the world (and who doesn't, right?) the following describes a simple model for extending the product life cycle:
- Price Reductions
- Promotions
- Re-packaging
- Re-designing
- New Markets
While many sources - especially marketing texts - will provide a litany of additional paths such as re-branding, co-branding, and re-positioning; I still feel that the the wiki found the most viable options in the five listed above. And aside from the New Markets option, all of them involve either cutting costs or adding cost and risk to the supply chain. Price cuts and promotions typically filter back into the supply chain and are not easy to obtain given declining volumes; they are ways to limit the bleeding, but they won't give the patient a new lease on life and will not foster good supplier relationships. Likewise, re-designs of attributes, features, packaging, or functions may be short-term help, but can create unexpected problems and challenges while driving unexpected costs. What if the re-designed packaging drives completely new shipping containers? What if a product re-design requires a change in suppliers and costs for obsolete inventory in the pipeline? As supply chain professionals, we are naturally flexible and can roll with the punches, but why is putting ourselves in front of Mike Tyson the first option rather than the last option?
Instead, we should learn the pipe cleaner lesson and use a long-standing product in a new way with new customers. Adding new channels of distribution is more likely to create opportunites for shipping consolidation and reduced pricing via increased volume. If we can keep our existing products relevant more often and refresh their purpose we can develop longer-term supply chains and better partnerships with suppliers because they know that there is always a chance that we will continue to need their services after the initial volume starts it's decline. Avoid risk. Increase savings opportunities. Create consistancy. Foster strong existing supply relationships. Build new distribution relationships.
Not every product can find pipe cleaner-level success by uncovering a radical new market for an existing product, but it serves as an opportunity for supply chain professionals to be a driving force for innovation within each organization and ask the tough questions in hope that we can push organizations toward more creative product planning.
- Price Reductions
- Promotions
- Re-packaging
- Re-designing
- New Markets
While many sources - especially marketing texts - will provide a litany of additional paths such as re-branding, co-branding, and re-positioning; I still feel that the the wiki found the most viable options in the five listed above. And aside from the New Markets option, all of them involve either cutting costs or adding cost and risk to the supply chain. Price cuts and promotions typically filter back into the supply chain and are not easy to obtain given declining volumes; they are ways to limit the bleeding, but they won't give the patient a new lease on life and will not foster good supplier relationships. Likewise, re-designs of attributes, features, packaging, or functions may be short-term help, but can create unexpected problems and challenges while driving unexpected costs. What if the re-designed packaging drives completely new shipping containers? What if a product re-design requires a change in suppliers and costs for obsolete inventory in the pipeline? As supply chain professionals, we are naturally flexible and can roll with the punches, but why is putting ourselves in front of Mike Tyson the first option rather than the last option?
Instead, we should learn the pipe cleaner lesson and use a long-standing product in a new way with new customers. Adding new channels of distribution is more likely to create opportunites for shipping consolidation and reduced pricing via increased volume. If we can keep our existing products relevant more often and refresh their purpose we can develop longer-term supply chains and better partnerships with suppliers because they know that there is always a chance that we will continue to need their services after the initial volume starts it's decline. Avoid risk. Increase savings opportunities. Create consistancy. Foster strong existing supply relationships. Build new distribution relationships.
Not every product can find pipe cleaner-level success by uncovering a radical new market for an existing product, but it serves as an opportunity for supply chain professionals to be a driving force for innovation within each organization and ask the tough questions in hope that we can push organizations toward more creative product planning.
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