Prioritising product durability: Procurement's Impact
In business, in the world, and in the realm of procurement, prioritising product durability and longevity brings numerous advantages that resonate with both businesses and the environment.
Here's why it matters:
Economic benefits
Longer product lifetimes can lead to cost savings for both consumers and manufacturers. Consumers can save money by purchasing products that last longer and require less maintenance or replacement. Manufacturers can benefit from increased customer loyalty, reduced warranty claims, and lower production costs.
Ensuring consumer satisfaction
More and more, consumers want products that are reliable and meet their needs over time. When products fail prematurely, consumers may become frustrated and dissatisfied, which can damage brand reputation and reduce sales.
Driving environmental sustainability
Extending the lifetime of a product reduces waste and conserves resources. When products are designed to last longer, they can be reused, repaired, refurbished or remanufactured, which reduces the need for new products and minimises the environmental impact of manufacturing and disposal.
By placing emphasis on product durability and longevity in procurement decisions, professionals can drive positive environmental impact, enhance customer satisfaction, and realise economic benefits.
Ashley Clark and Philip Hong of Proxima, hold that the value that product durability and longevity brings to an organisation’s operations vary, based upon the product and business needs; a relative and contextual approach. And they know what they’re talking about.
Clark and Hong, are Proxima’s Vice President and Principal Consultant, respectively, and for the few that don’t know, Proxima is a leading global procurement and supply chain consultancy with deep and broad experience under its belt.
Proxima provides expert procurement services to a wide range of clients and everything from assessments through to strategy.
Clark and Hong give us their insights on the subject of product durability and longevity, as well as their importance.
When it comes to product durability and longevity, they feel that it helps to reduce waste and downtime at the plant due to the higher quality of the product, as well as positively impacting brand loyalty by reducing customer frustration with the product.
Incorporating product durability and longevity can also add value to customer satisfaction, cost efficiency, brand reputation and environmental sustainability; and contributes to long term success in the marketplace.
Why should this be at the forefront of a purchaser’s mind?
Ultimately, the purchasing organisation is a company function and should align with the business objectives. If the product is cheap, then purchasing a higher-quality component is a lost cost for the company, as the customer will not realise the higher value of the product.
Contrastingly, if the product is considered to be high quality and a cheap component is purchased, customers could lose respect for the brand and become frustrated with their purchase.
Clark and Hong agree that designing a product with durability and longevity in mind from the start instantly negates scrap and waste, as well as reducing the chance that the product will be returned. This helps the overall operations function become more sustainable and empowers the end customer to reduce their waste as well.
Is this common practice? If not, why not?
“Spending time considering the product is not a common aspect of the procurement strategy, as there are often other supply and pricing challenges occurring,” says Clark.
However, being able to adopt this perspective brings a more strategic view to the procurement category. That being said, this is not typically considered common practice due to cost savings being pushed down from finance departments. This could be seen as a misalignment of incentives where procurement is looking at short term savings versus what is best for the brand.
How can organisations incorporate this into their procurement strategy?
“Setting measurable KPIs, such as including operational waste costs included in procurement’s KPIs, can help organisations incorporate this into their procurement strategies,” says Hong.
“It’s important that procurement teams spend time within other functions across the business such as sales, business development and engineering, to understand how well the product is performing and whether there are any new strategic or design needs.”
This information can then be fed into developing the procurement strategy to ensure the right supply base is utilised and the correct technical capabilities are in place to support business needs. “Suppliers should also be heavily involved in plans to support these new technologies and designs as this creates the most value for the business and end customer.”
Technologies and long-term solutions to Product durability and Longevity
Both Clark and Hong feel that a few technologies exist in this area focusing on measuring metrics at operations and sales. This could include a more robust ERP system where KPIs can be measured and visible or communicating with peers through a collaboration software.
Though, they say, this ultimately comes down to the product itself, a well thought out design with upstream maintenance and regular reviews of its effectiveness and performance ensures that a product is durable and suitable for the long term.
