TRAVERSE CITY, MICH.-In the hotly competitive personal computer industry, being six months late to market with a new product is a lot like taking a 300-foot bungee jump with a 400-foot cord. That is the dizzying perspective of David S. Hoyte, vice president of cost management at IBM Corp. Personal Systems Group of Research Triangle Park, N.C., the unit that makes PCs, printers, network hardware and other consumer goods.
Most of all, speed to market is speed to profit, he said.
Hoyte discussed the importance of timely product development and manufacturing at the University of Michigan Management Briefing Seminars in Traverse City. His remarks about shortening product-development cycles were of particular interest to a gathering largely composed of automotive industry people.
Auto companies, which are trying to get vehicle development cycles down to two years from three years or more, should consider the predicament of the computer industry, where customers continually demand lower prices, better performance and top quality.
The average computer industry product life cycle - from concept to end of production - is shrinking from three years to 18 months and, in some cases, about a year, Hoyte said. Manufacturers are under intense pressure to be first to market with the latest technology, when consumers are most receptive.
If their timing is late, manufacturers risk bringing computers to the market after all the sizzle has gone out of the latest technological wrinkle, Hoyte said. They miss out on lucrative early sales and have too much inventory of a dated product. The industry, he said, has taken on the combined character of the ``fashion business and the fresh fish business.
To cope, Hoyte prescribes a sensible melding of a build-to-order system with a classic build-to-plan strategy. Popular products can be mass-produced while lower-volume models can be supplied by flexible, short-run manufacturing cells. And distribution centers likely will pick up orders for unique computer configurations.
Hoyte predicts ``whole new levels of speed'' in manufacturing in the next decade. Thus, suppliers will become even more important in meeting time-to-market goals.
Suppliers should be treated as full members of your own business,'' he said.