Developing and commercializing physical products is a challenging process for several reasons. Although the potential gains can be enormous for those who succeed, the risk and complexity are high due to significant challenges in design, production, logistics, and scaling, writes Aggrator partner Salvador Baille.
1. Design is extremely demanding
To create a successful product, you must balance three factors: Shape, Fit og Function. The visual design is only one part of the equation – even more important is the product’s ability to adapt to other components in the system it is intended to serve in order to fulfill its functional purpose. At the same time, the design must take into account the production capabilities of the supplier and the choice of materials.
2. Production requires precision
While software can be easily distributed globally without quality variations, physical products face significant challenges in this regard. Small differences in material properties or physical dimensions of the components can lead to catastrophic failures. Additionally, production tools wear out over time, creating additional challenges when it comes to maintaining quality and cost efficiency.
3. Logistics can be a nightmare
The global value chains are extremely complex, with components often being produced in different countries before being assembled. Many parts are produced by only a few suppliers, making the supply chains even more vulnerable to disruptions. Errors in logistics or poor compatibility between parts can lead to significant financial losses.
4. Scaling challenges
Production increases can lead to large losses instead of increased revenues. Scale advantages can turn into scale disadvantages. Auto manufacturers often experience this when they have to recall massive numbers of cars with defects.
The challenges related to design, production, logistics, and scaling therefore require a holistic approach to increase the chances of success. Companies that succeed in this arena must have experienced teams working hands-on with design, production, and logistics at the same time – having the expertise in a board that meets twice a year is not good enough.
Fortunately, there are methods and tools that can make the outlined challenges easier to handle.
1. Digital prototyping and simulation
To ensure that a product meets the requirements for Form, Fit, and Function, digital tools such as computer-aided design (CAD) and finite element analysis (FEA) should be used early in the development process. This enables simulating the product’s properties and identifying design flaws before prototypes are made. Additionally, digital copies of the final product, the so-called Digital Twins, can be used to monitor and simulate the product’s performance in real time, providing valuable data for further optimization of the actual product.
2. Automated quality control
To handle precision requirements and minimize variations in production, machine learning and sensor technology can be implemented in the production line. Automated measurement systems can detect deviations in components in real time and adjust the process before errors occur. This reduces wear on tools, increases production capacity, and ensures consistent quality.
3. Quality contracts and back-to-back agreements
In logistics of long supply chains, traceability, transparency, and accountability are critical. Clear contracts referencing international quality standards and back-to-back agreements are therefore essential. The result is improved predictability, better quality and cost control, and fewer discrepancies in delivery.
Smart and optimal handling of the inventory also contributes to less risk in the event of a supply disruption.
4. Standardization and modular product design
By developing standardized components that can be used across multiple products, the complexity of production and supply chains is reduced. This allows for faster adaptation to market needs. At the same time, a modular mindset, where multiple identical products can be assembled to meet the needs of different customers regardless of size, makes it easier to scale production without significant cost increases.
The design and production of physical products can be profitable, but vulnerable to inefficiencies. By implementing these proposals, physical products can nevertheless be made robust, cost-effective, and competitive in the (still) globalized world we live in.
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