By: Doyle Sumrall, NTEA managing director
This article was published in the June 2016 edition of NTEA
News.
It seems as if the business cycle has started transitioning. While this
trend is disputable, work truck industry companies dealing with
Class 8 vehicles may agree. For many NTEA members, business is good, but they
still sense the need for caution or at least vigilance. When focusing only on
the work truck market, the climate appears optimistic in many ways. Construction
has improved, and housing prices have shown some energy. Although the Producer
Price Index has increased slightly, it appears to be almost entirely driven by
oil.
Anecdotal evidence indicates many organizations have focused intently
on their core competencies since the economic challenges encountered nearly a
decade ago. Positive results have come from this effort. Overall, companies in
the work truck industry are stable and have recently been looking to solidify
their standing or expand. Industry professionals are considering adding
product options and variation or tightening product lines to improve
delivery quantity and quality. Expansion comes in two forms — new products and
new markets.
Customization is another winning strategy. Many industry organizations
are focused on giving customers what they want — extra doors, custom features,
new combinations, etc. An effective approach is integrating lean practices
with solid streamlined engineering to get a job done right the first time
at a reasonable cost.
Helpful resources
All in all, this is exciting
stuff. Each strategy is worthy of its own article, and selecting or creating new
products is a good place to start. According to survey results cited in an
article, New Product Success Rate: Why So Low?,
“Only about 61 percent of all products launched by existing companies turn out
to be successful in the market.” The data reveals the best companies (defined as
top third in their industry for new product development) have a success rate of
about 82 percent as compared to 59 percent for the rest.
The article pinpoints how leading organizations approach
new ideas, identifying three reasons for their ability to
differentiate:
- Project selection and
definition from the start
- Project execution
- Management’s outlook on
innovation and new product development
In a recent issue, Popular Science shared a slightly different take on
the same subject in The
Inventor’s Handbook, The Essential Guide From Idea to
Market — an article by Rachel Nuwer.
The principles discussed provide a great roadmap for managing new ideas and
inventions. This is a unique piece written in the context of the new term,
maker. As everyone in the work truck industry is a maker to some degree,
this provides an interesting perspective. While the term tends to be more
closely associated with technology, 3-D printing (additive manufacturing) and
the like, it can be applied to the industry as a whole.
In these cases, the authors point out the importance of process and
outline how change demands a company-wide effort with involvement from all
departments. The process of embarking on a new product or service launch is
important. It’s equally critical to put as much energy and thought into your
selection and marketing tactics as in the actual product development.
The Connecticut Invention Convention lists some inventor guidelines which may
be helpful in your journey toward innovation.
For questions on this article, contact Doyle Sumrall at
doyle@ntea.com.