What's the true cost of not involving procurement in your new product development? Delays, additional costs and missed opportunities
In the race to bring new products to market, many organisations behave like the hare from the famous fable: they prioritise speed to start above all else and celebrate quick wins without understanding the long-term consequences of their decisions. This often translates to quick decisions, such as selecting suppliers based solely on the fastest sample delivery times or the lowest cost. However, this "hare" approach can lead to costly delays and unforeseen challenges down the line.
We recently encountered a situation where a client selected an API supplier based on their ability to deliver samples within 4 weeks, while other suppliers quoted 6 weeks. This seemingly swift decision, however, overlooked a critical factor: regulatory compliance.
After months of development and validation, the client realised that significant investments would be required to ensure the chosen supplier met the regulatory requirements of their key target market. This unexpected hurdle resulted in a year-long delay to market launch, a significant financial setback, and a valuable lesson learned.
This experience highlights the importance of a more strategic approach to procurement. Instead of focusing solely on speed to start, organisations must prioritise a holistic evaluation that considers all relevant factors, including:
Regulatory compliance: Ensuring the supplier meets all relevant regulatory standards in target markets.
Quality and reliability: Assessing the supplier's quality management systems and track record.
Financial stability and long-term viability: Evaluating the supplier's financial health and their ability to meet future demand.
Sustainability and ethical practices: Considering the supplier's environmental and social impact.
By carefully considering these factors upfront, organisations can avoid costly delays and ensure the long-term success of their new product launches.
Other examples of issues that can significantly delay a project but where a front-end procurement process can help are:
Changes in the suppliers production process or specifications occurring between development and commercial supply: Collaborative and transparent discussions at the start of the project can identify future changes and joint problem-solving can help avoid or mitigate impacts.
Delays in supply of materials or documentation for time-critical steps: Strong communication and regular updates with partners can ensure there are no surprise delays to achieving key milestones.
Unexpected quality events disrupting project timelines: A failed audit or a deviation can instantly derail a project timeline and lead to costly last-minute interventions. A robust supplier selection and approval process at the beginning of the project can significantly reduce the risk of quality failures in the future and build trust in the long-term viability of the partnership.
Just like the tortoise and the hare, it's not always about starting the fastest, but rather about finishing the race strong.
Book a complimentary consultation to see if you can avoid delays to your new product developments - contact@collaborative-sourcing.com