Friday, June 29, 2007

Cost, quality, and speed in product development

There is a saying in product development that goes something like Cost, quality, and speed - pick any two. And this is so true - the best you can do is 2 out of 3 (and most can't even get that).

I hit this with my Japanese Soaking Tub client. Truthfully, this company really only has 1 right now - quality. The tubs are all hand made, and of a very high quality. These take time to make (4 to 6 weeks), and another 4 to 6 weeks to ship by boat to America - so definitely not speedy. And the tubs are rather pricey (as you would expect of hand crafted items from Japan).

This all came to mind when we were talking to one of the company's distributor/retailer. They often want it all (not uncommon for people in sales). It would be great to be able to give them everything (high quality tubs right away at a super low price), but it just isn't possible. You have to make trade offs to improve one area, at the expense of the other areas.

If someone really needs the tubs faster, they can pay more (sacrifice cost) to have it shipped by air instead of boat. This would save a few weeks of time, but at a cost of some $4-5,000 (was done once - for luxury goods like this, sometimes people are willing to pay). But beyond that, there isn't much that can be done to speed up the process, at any cost.

I guess quality could be improved by having the manufacturer take more time with each tub to ensure it is shaped and colored just right (sacrificing time for quality), though in this case there quality is so high that I am not sure there is much room for improvement.

Price could be lowered by getting similar tubs made in China or other low cost country, but this would likely affect quality (at least for a few years as they went through a learning curve to figure out how to make large ceramic bath tubs).

So - cost, quality,and speed - pick any 2.

0 Comments:

Post a Comment

<< Home