Four tips for a successful new-product launch
New-product launches come with a special set of delivery challenges. Here are some steps you can take to ensure your new product arrives on time and ready to roll.
By Toby Gooley
When manufacturers and retailers announce that a new product—an eagerly awaited mobile phone, for instance, or footwear endorsed by a famous athlete—will be available for sale on a particular date, consumers trust that they'll be able to buy that product on that day. But few, if any, of them understand what it takes to get those phones, sneakers, and other hot new products delivered and ready for sale everywhere at the same time.
What it takes is effective planning, coordination, and communication among shippers, motor carriers, and the third-party logistics service providers (3PLs) that direct the truckers as they deliver the new product to hundreds of locations within strict delivery windows. In consumer electronics, for instance, it's not unusual for carriers to be tasked with delivering 1,000 or more pallets of product and merchandising displays to an equal number of stores within a span of just one or two days.
Regardless of the industry or product involved, there's a lot any shipper can do to help carriers and 3PLs execute this complex choreography. Here are four recommendations.
1. Provide plenty of advance notice. New-product launches—whether large or small, national or regional—require flawless execution under tight deadlines. That's why giving carriers and 3PLs advance notice is so important. For a large-scale nationwide campaign, 90 days is ideal, says Jim Monkmeyer, president, transportation, for DHL Supply Chain. That allows enough time to get bids and negotiate rates and service levels with multiple motor carriers, and for the selected carriers to position the necessary equipment and personnel when and where they will be needed, he says.
In some cases, such as when the shipper and carrier have previously worked together and have an established procedure for rollouts, a month or even a week may be sufficient, says Matthew Bosko, senior logistics specialist and project manager with the Erie, Pa.-based 3PL Logistics Plus. Bosko leads the company's new-product rollout team, which specializes in managing deliveries of time-sensitive new products and merchandising displays. But in general, he says, "the more notice the better, so the motor carriers will have at least a rough idea of start dates, pallet quantities, delivery date requirements, and so forth." As the launch date nears, the shipper can update its forecast and instructions to the carriers as needed.
If the product is specialized in some way and requires new or different equipment than what's normally used, "then you would want to discuss that well in advance, because the carrier can't necessarily get that equipment overnight," advises Andy Moses, senior vice president, global products, for Penske Logistics. This is particularly important in times of tight capacity, he notes.
2. Clearly communicate requirements and expectations. Nobody can meet expectations if they don't know what they are. Carriers and 3PLs need to know exactly what the shipper requires in terms of delivery deadlines, locations, and procedures as well as service levels, responsibilities, and pricing. All of that is subject to discussion with all parties, of course; service providers will want to verify that they can meet those requirements before they sign on the dotted line.
In many rollouts, there will be new suppliers, new origin points, new customers, and new geographies, all of which affect outbound routing and will require careful advance planning by the carrier and 3PL, Monkmeyer points out. When new suppliers are involved, they should be included in discussions about shipping plans with the carrier and/or 3PL, he adds.
The experts we consulted recommend that shippers, carriers, 3PLs, and perhaps suppliers schedule regular calls to share progress reports and updates. Because product launches are anything but routine, the experts also suggest that the customer and carrier communicate more often than usual and establish a procedure for addressing problems well before the rollout.
Scott Frederick, vice president of marketing at Logistics Plus, offers one example of an out-of-the-ordinary delivery requirement that required clear advance communication. One of his company's customers, a national consumer electronics chain, had hired people to set up merchandising displays for a new product so it would be ready for sale on the same day at all of the retailer's stores. "They were going to have people ready and waiting to set that up on a specific day, so it was critical that we get to the local stores on time," he recalls.
There's universal agreement that the more information about the new product the motor carrier has in advance, the greater the likelihood that deliveries will go smoothly. Whether a product is brand-new to the market or only incrementally different from its predecessors, the carrier and 3PL need to know all the details, including how it differs from products they've handled for the shipper in the past, Moses says. For example, new products often have different packaging shapes and sizes from items the carrier has previously transported, which affects carton, case, and pallet size and weight as well as how much product can fit in a truck. "We need to properly document the new SKU's [stock-keeping unit] characteristics so when orders come along, we can build that load accurately," he explains.
One often-overlooked aspect of new products is the commodity's value. If a new product has a higher value than is typical of the shipper's products, it's important to convey that to carriers so they can determine whether their normal liability will cover the shipment, Frederick says.
3. Work with your providers to anticipate the new product's impact on operations and costs. Even small changes in things like routing, timing, volumes, and packaging can have a big impact on efficiency and costs. Sharing all of the product and shipment details with the carrier and 3PL allows them to advise the shipper on the likely impact as well as on mitigation strategies. If a new version of a product requires an increase in packaging size, for example, it might mean that fewer items can be loaded in a truck, requiring more trucks and thus raising freight costs.
Product launches can affect how people do their work too. "If the new product requires integration of a new activity with your existing network ... and the scope of work changes, then we will need to explain that to our drivers and supervisors," Moses says. Consider the example of medical supplies that used to be palletized for large weekly deliveries to hospital loading docks but now are delivered daily as loose cartons directly to nursing stations or storerooms inside the hospital. That's a significant change in drivers' jobs that would not only require training in the new procedures but also affect how much time they spend at that one location.
Shippers should also think about how potential problems might affect deliveries at different points in the supply chain and work with carriers and 3PLs to develop an action plan for handling such glitches. Monkmeyer has seen shippers order new products from overseas and assume they'll be able to whisk the goods through customs and on to stores the way they always do. However, "if it's the first time you're shipping from that country or from that supplier, that first load could end up sitting in port for two weeks while customs checks on it," he cautions. That will cause a major delay in the product's arrival in stores, of course. But the unforeseen change in timing could also result in further holdups down the road if the motor carrier is unable to shift its resources at a moment's notice when the shipment is finally released.
Motor carriers and 3PLs may need to acquire new transportation management software or modify their existing systems to accommodate large or frequent product rollouts, especially if customization of transportation plans, internal management processes, or billing is required. And if new suppliers are involved, then some type of technology integration could well be necessary.
4. Choose a partner with experience in handling new-product launches. New-product launches, with their demands for precisely timed deliveries to hundreds or thousands of far-flung locations in a tight time window, are not for amateurs. There can be advantages to working with motor carriers and 3PLs that have extensive experience meeting those specialized requirements. They have the people, processes, capacity, and systems in place to successfully carry out these uniquely challenging assignments. The dedicated new-product rollout team at Logistics Plus, for example, has standardized the way it gathers, documents, and shares information internally and with its core group of carriers. Each customer and product launch has unique requirements, Bosko notes, but the standardized process saves a lot of time while minimizing slipups and ensuring that everyone knows what's required.
The time-sensitive nature of product launches means there's no room for error when it comes to deliveries. Bosko, Penske's Moses, and Monkmeyer of DHL all stressed the importance of using motor carriers that thoroughly understand the specialized needs of this business segment and have consistently demonstrated reliable, on-time performance. Shippers that regularly roll out new products with non-negotiable delivery deadlines may want to consider dedicated contract carriage, where a 3PL provides dedicated equipment and personnel and manages the fleet for a customer, Moses suggests.
Whether shippers work with a 3PL or directly with motor carriers, the best outcomes occur when they give their service providers advance notice, communicate expectations, share detailed information, and work with them to anticipate how changes will affect operations and costs. Do all that, and those high-performance phones and hot new sneakers will be ready and waiting when the first customer walks through the door.
About the Author
Contributing Editor Toby Gooley is a freelance writer and editor specializing in supply chain, logistics, material handling, and international trade. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
More articles by Toby Gooley
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