Speed to market refers to how quickly a company can launch a new product or service compared to their competition. Speed to market includes the entire process from designing to manufacturing to the launching of the product. Consumers desire the best product for the best value and want to see a quick return on investment. Suppliers understand the importance of their customer’s needs, and work to create the most cost-efficient and innovative product that is delivered in a timely manner. When companies and suppliers understand the importance of speed to market, the customer’s needs and desires can be reached in a more efficient way. Here are a few reasons that speed to market is an important aspect of any project.
1. Increases your return on investment: When the speed to market principle is considered in a project, not only can a company save time, but they also can save money. Consider the following example:
Imagine a new investment of $100M for a new DC with an interest rate of 4%. If a designer, contractor, or project manager understands the speed to market methodology, they may finish the project in 4 months compared to 6 months. If the project schedule is reduced by two months, there could be $667,000 in savings!
2. Improves cash flow: When a company can receive inventory faster, the process time is reduced, which leads to an increase in cash flow. This increase of inventory speed saves money on payment terms, transfers supplies to stores faster, and reduces overall labor.
Integral Strategic Solutions provides speed to market through our Integrated Project Delivery method and our dedicated team. Our team of partners work together to provide comprehensive services for your project needs that reduces project time and saves money.
Not only does Integral Strategic Solutions recognize the importance of speed to market, but so do other companies. Greg Rake of Pier 1 Imports explains, “the value of an effective supply chain often boils down to speed: How fast can a retailer get a product out – and before its competitors do?” Rake used the example of a new product line. “There is a short amount of time when a retailer may be the only company in the market that has the particular item or feature. During this time, the retailer is able to earn full-price sales. But once larger companies or big discount stores get their hands on the product, margins can fall”.
Speed to market is critical for supply chain management. The best software, people and processes will help retailers meet consumer demand and achieve profitability goals.