Carmakers Vs. The Vacuum King: Product Innovation In The Time Of COVID-19
If necessity is the mother of invention, the COVID-19 pandemic is the mother of all necessities. So it’s hardly surprising we’re seeing a host of product innovation bubble up around the world. Nowhere is this more apparent than in the search for new ventilator designs and manufacturing capability. Over the past month, a host of tech, consumer electronics, and car manufacturers have joined a mad scramble to solve the ventilator supply chain problem.
But ventilators are not easy to make. They must meet the exacting standards of medical-grade equipment. Lives depend upon the quality and accuracy of the machines. Given this, the existing manufacturing capacity in the world is limited — optimized as it is to support nonpandemic demand.
To solve the immediate challenge of insufficient supply, two distinct strategies emerged:
The Pragmatic Strategy — Scale The Supply Chain
One way to solve the demand problem is to find ways to scale up the existing ventilator supply chain. But the complexity of these machines makes scaling production challenging. To manufacture some components, new casting molds are needed. And the complexity of sourcing new parts requires capabilities to scale and manage the logistics of a very complex supply chain.
Complex supply chain optimization is the bread and butter of the auto industry. And so GM, Ford, and Tesla have transformed some of their manufacturing capacity to help increase production of ventilators by assembling components for existing ventilator designs. Existing manufacturers — Ventec Life Systems, Vortran Medical, GE Healthcare, and Medtronic — have all partnered with auto manufacturers to accelerate production of their designs. And the auto manufacturers have turned to their component suppliers for help building the needed ventilator components.
This very pragmatic approach addresses the immediate need to boost production capacity. It’s also a conservative approach to solving a big hairy problem. And it takes time.
The Innovator’s Strategy — Reframe The Problem
Sir James Dyson knows how to design products. Such innovators are masters at understanding a challenge and reframing the problem so it can be solved in a new way. In fact, the UK has a long history of innovation (and a less polished history of capitalizing on inventors’ ideas). Given the same ventilator challenge, it’s perhaps no surprise to see a flurry of innovation stem from both Dyson’s company and British-based Formula 1 teams. Dyson reframed the ventilator challenge as a design and speed-of-production problem. He sought to redesign the ventilator to make it easier to manufacture at scale. And yet, despite Dyson designing a new ventilator prototype in just 10 days, it still may not be fast enough.
Innovative organizations like Dyson and the F1 teams that must redesign cars each year nurture a culture that helps employees cope with ambiguity and solve challenges with fresh ideas. This brings business agility, but these firms are not immune to regulatory forces.
What It Means For Your Digital Business Strategy
To solve the ventilator crisis, we need pragmatic approaches and product innovation working in partnership. And that’s also true of digital business strategy.
Many traditional organizations struggle to scale up legacy supply chains and business operations to work at the speed of digital business. Most legacy systems and processes were never designed to be flexible, adaptable, or fast. And trying to adapt these business capabilities to an urgent need to digitize and move fast is hard.
The pragmatic approach is to modernize components of the enterprise piece by piece, based upon the potential business and customer impact. The innovative approach is to reframe the problem and solve it in a completely different way. Today’s digitally advanced firms are blending both approaches.
Wherever you are in the digital maturity spectrum, look for ways to embrace the innovator’s mindset, create new digital products, and build a foundation to redesign your business to solve for customer outcomes in new ways. Laggard firms may find it faster and ultimately cheaper to rebuild from the ground up. But be mindful that you will rely on go-to-market partners and maybe even regulators who may not move at the speed you’d like.
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Thanks to Research Associate Alessia Stewart for contributing to this post.