The PDMA Handbook of New Product Development

31.4. The Flexible Supply Chain and Lean Launch

Advanced supply chain capabilities offer an alternative way to support a successful new product launch as well as contain loss when products fail to meet expectations. The lean launch method involves development of a flexible supply chain system capable of rapidly responding to early sales success to limit commitment of inventory during introductory rollout. Flexible supply chain logistics systems are characterized by coordinated source, make, and deliver operations that drastically cut raw material to consumer cycle times and enable the firm to respond to actual market needs rather than anticipate demand with inventory.

NOTE

The lean launch method involves a flexible supply chain capable of rapidly responding to early sales success and limiting the commitment of inventory during introductory rollout.

Postponement is the basic principle driving the development of lean launch strategies. Leading-edge firms increasingly use postponement as the logic for flexible operations that enable quick reaction to customer needs and actual market demand. Postponement delays finalization of product form and identity to the latest possible point in the marketing flow and postpones commitment of inventory to a specific location to the latest possible point in time. Cutting lead times can reduce uncertainty and increase operational flexibility so that products can be produced to order or at least manufactured at a time closer to the point when demand ...