3 reasons for failed physical product launches & the solution for it

According to McKinsey >50% of new product launches fail to hit business targets!¹

Unmet targets mean:

1. Reduced margins leading to unprofitability and high carbon footprint to bad reputation
2. No willingness to pay from customers due to increased price or CO₂ emissions
3. Lost investments in product development, competitive edge & business growth

Where lies the biggest opportunity for impact along the product lifecycle to ensure successful products?

80% of product total cost and CO2 impact are set during the design & development phase^2,3

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Low levels of digitalization and high volatility make R&D intransparent

High customer demands for customized products and shorter development times complicate targeted cost and sustainability management in product development, especially for SMEs. R&D involves multiple departments, from executives to engineers to product and procurement managers, who currently rely on static spreadsheets. This leads to information asymmetries, inefficient processes, and siloed teams - resulting in unmet targets, wrong decisions, and missed savings opportunities.
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Summarized core reasons are:

• Lack of collaboration due to isolated teams, absence of cost awareness, restricted resources^1,4
• Product complexity due to changing concepts, variants and intransparent spreadsheet chaos
• Volatility & uncertainty in markets, supply chains, overhead costs, currency impacts etc.

Static excel sheet and outdated software can't keep up with these dynamics, resulting in unmet targets of new launched products.

Reasons why spreadsheet are outdated:

• Scattered, inconsistent data across departments with manual tracking and high coordination effort.
• Product complexity leads to time-consuming calculations, and limits simulation possibilities.
• Manual data entry with missing integrations to other systems lead to inconsistent data & wrong decisions.
• No history and reuse of components from old projects, starting from scratch every time.
• Only experts understand scattered & complex data, leading to limited collaboration & missed optimizations.
• The know-how of experienced employees is lost when they leave the company due to a lack of standardization.

The solution?
Creating transparency through centralized product cost- & carbon footprint management  

Moving away from error-prone spreadsheets towards digitized product cost- and carbon footprint management for hardware product development. With valuemize we have built a cloud-based software solution for industrial SMEs that promotes intuitive Bill of Material management to enable cost & sustainability transparency for cross-functional teams, leading to the optimization of product costs & carbon footprint. Increasing resource efficiency by automation, use of existing data & AI.

Product cost management in product development as no. 1 lever for highest profit growth⁴

Have more questions?

Reach out to our experts via our contact form or schedule a meeting to see how digital product cost and carbon footprint management can enhance your product's success.

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Sources:
1) McKinsey & Company

2) KAYSUN

3) EllenMacarthur

4) McKIinsey & Company