There is tremendous waste ingrained in the current business model mostly defined by the way information moves between companies and within industries. The current model represents how we’ve always done things, making this waste invisible. It’s just the way it is.
If you are embedded in business or academia, the focus on improvement is driven by the way things currently work, which revolves around new software tools to enhance productivity (IoT), cloud-based systems to better connect enterprises and those they interact with (suppliers, customers). This kind of connectivity is critical as more and more companies seek greater efficiencies. Still, it’s the same model with the same limitations, albeit somewhat more efficient.
Within the current model, information about new technologies, new processes are all bottled up at the frontend of the product design cycle, waiting to be discovered via trade shows, seminars, trade magazines, supplier presentations, etc. These ideas, the new components or materials, can take years to reach the right folks, wasting valuable time and resources. This wasted time can result in many lost opportunities like: first to market, best-in-class capabilities, lowest cost. This is before the new product even reaches the starting line!
Having done all the research and having found the right parts, the engineering/purchasing teams work with suppliers to ensure each component will do what it says and is available when needed, in the right quantities. But, that’s only part of the story. The engineer doesn’t have all the information. He has only what he could find. He doesn’t know about that new material from a supplier in Germany which was introduced only last month, which could dramatically improve the quality of the product and lower its cost. He won’t even know about this new material until he reads about it, six months from now. The model doesn’t give him the information he needs, when he needs it. So, he proceeds with what he has.
As the product moves from development into production, there’s been a lot of discussion and speculation as to the market potential. How many units should be built? Where should it be built? Sales and marketing do their best to offer up their estimates. You read about it all the time: companies under or over estimating the market potential of a certain product with disastrous results. That’s the current model. What if as soon as you knew the product characteristics and requirements you could “survey” prospective buyers to get a handle on the market potential. What if you could tailor that product to better fit the market requirements to maximize sales and profit? What if you could instantly locate most potential buyers once the product is ready? That’s what the new model allows. That’s Vloyen.
Today’s production systems continue to build inefficiencies into the product along the way as the latest and greatest strategies are absent, leaving the product to be built using yesterday’s technology. The current model is static. There are incremental improvements to the process but the innovative ideas and strategies, new equipment, new chemistries are stuck, waiting to be discovered, sometimes needing years to work themselves out into the market. As result, production processes are less efficient, the product is less capable and more costly.
The new model instantly introduces all stakeholders: product development, marketing, sales, production, etc., to all the latest information they need. The product is produced at the lowest cost, with all the attributes the customers require.
With the current (old) model there’s a lot of speculation, a lot of assumptions, a lot of finger crossing. You see it all the time: products that seem great on the drawing board but fail to excite the market. Or products that excite the market, but the companies have underestimated demand, leaving millions or billions of dollars on the table in lost sales and missed opportunity. Instead of dominating a market, the door is left open for their competitors to catch up.
A classic example of this is when Apple approached Intel about making the microprocessors for their iPhone. Intel misunderstood the potential of the mobility market, losing out on $billions in sales. With Vloyen Intel would have been able to accurately assess the market and make a very informed decision.
What if a company could instantly connect with all prospective buyers for their products? With Vloyen, buyers would likely be in line to purchase, greatly reducing the need for traditional marketing and sales. This aspect, alone, will drive huge improvements in productivity.
Current (old) model vs New
The current model pushes information from one end of the supply chain to the other, hoping to reach the right folks at the right time. The typical cycle time for new product development, from start to finish, is about a year but doesn’t consider the time on the frontend needed to stay up on the latest products and services entering the market. Most, engineers attend one or two seminars or trade shows per year, subscribe to technical journals and newsletters. Even then they aren’t able to take in all that’s being presented. There’s a ton of pent up information being thrust onto all who will listen, all at once. It’s like drinking from a fire hose! Conference organizers and publishers do their best to structure their information so that “consumers” can gather what they need in short order. Still, some of these products have already been on the market for months or even a year two. And, not all new products are represented. Again, information is locked up, waiting to be “pushed” to the user.
The new model pulls information at the exact time, to the right people taking a process which can span years down to months! Think of how much a company can achieve by building and delivering a product that is an ideal match to the market, 2-3 times faster. That’s a huge savings!
You can get a sense of the way things work now by watching water flowing down a river. At the source, water slowly trickles off hillsides into small streams where they meet with other creeks, collide and begin to race downhill. At every point there are rocks, branches, twists and turns which disrupt the flow. Rocks under the surface cause the water raise up. Large rocks breaking the surface cause eddies where twigs and branches can spin for days before breaking loose. At some points along the river, water drops off a cliff, smashing into the rocks below before it regroups and heads downstream.
In business much of the same things occur. At the start of a new project an engineer seeks out information from lots of different sources as he or she investigates the latest and greatest components for a new product. The information trickles in. As the new product design begins to take shape, the flow of information begins to pick up speed running into lots of obstacles such as: obsolete or alternative components, out of date information, market analysis, cost constraints, management approvals, etc. Just like a river, it’s a very linear and turbulent process.
What’s not seen or understood is that the process is fraught with outdated or delayed information. The design team is doing its best to integrate the latest materials and components into this new product but, again, the information flowing to them with which to make their decisions is linear and static in most cases. The OEMs typically use the same group of suppliers which are unlikely to share all their development efforts. Likewise, the OEMs keep their IP close-to-the-vest. So, even though they have a trusted relationship, information is siloed and unavailable much of the time, again, contributing to the overall inefficiencies of the model.
A simple description of the old vs the new would be the old representing a linear flow of information (the river) with stop and starts, missing pieces, barriers impeding the flow vs a hub and spoke model with information flowing through the hub unimpeded, protecting IP but making all necessary information available to all those connected, all the time.
The Vloyen model unlocks the flow of information, allowing it to move freely between companies and within industries. It’s all there, all the time, right when it’s needed!