a) A considerable amount of careful coordination will need to occur across a variety of different functional units in order for the product to be received well in the market. This includes coordination between operations and production functions as well as across marketing and sales functions. Without sufficient and commensurate coordination, the product launch may fail.
To start, there must be a tight and constant interface between marketing and production. The marketing department’s basic goal is to prove the noodles’ value to the market and to entice the market to purchase recurrently. It is crucial to keep in mind that the blitz strategy is only an entry strategy; once the blitz is complete the organization hopes to double its sales in the second month and at a higher price to buyers. In order for that strategy to work the marketing effort needs to not just prove value once but to do it in a way that sets consumer expectations. If consumers are excited enough to buy once—but then disappointed in their purchase—the second month of sales will decline. As such, we want to see marketing working closely with production to ensure that the marketing content is commensurate with the product’s deliverables. If it is brought to market with claims that are falsified based on customer experience, there will be a decline in sales.
There also must be fluid coordination between production and distribution. The case is rather vague on how the product is distributed, but presumably Yummy, like other companies in this vertical, distributes through grocer partners, convenience stores, and the like. Given the blitz strategy, Yummy will need to ensure that production is able to keep up with the plan of distribution. Some locations are likely to be more targeted than others; for instance, they’ve made a concerted effort to target local schools so we might assume stores that are in school zones will need to be stocked more than stores that are on suburban outskirts or rural areas. Details like these should be communicated between distribution and production, and of course, supply chain functions like procurement so that any changes adjustments, etc. can be quickly responded to.
b) As was intimated in our previous response, logistics management plays a very important role during the introduction phase of a new product. Understandably, when people think about new product introductions they tend to focus on the marketing and design/production aspects of the new product—how the product is positioned, how it is designed, what inputs are required, etc. But it is important to remember that no amount of creative marketing or innovative engineering can make up for a product that isn’t introduced when or where the NPI hype said it would be. That falls to logistics.
Logistics is very much like the link between production and distribution. There are some obvious ways in which this is true, such as the fact that logistics has a delivery function that brings new products from production to distribution outlets (and back, for that matter). But there are less obvious—yet still very important—ways that logistics interfaces between production and distribution. For instance, part of logistics is ensuring that production and distribution are working with the same physical product details. Especially with products that occupy shelf space like Yummy’s, logistics must help ensure that deliveries are described (and fulfilled) accurately since distributors will make purchase and planning decisions based in part on the amount of space a product takes up. A discrepancy between what they were expecting and what they receive could either result in over or under purchasing, which aside from straining relationships, represents lost revenues.
Reverse logistics cannot go unmentioned either. While every company hopes that NPI’s go off without a hitch, realistically a company must plan for reverse logistics. Logistics then becomes a customer service function, responsible for ensuring the efficient and seamless return of defective or undesired goods. This plays a role in how Yummy serves its customers and leaves (or doesn’t leave) a favorable impression based on their customer service. It would, of course, be disastrous for an NPI to be bogged down not just be returned goods but by inefficient, unresponsive interactions with dissatisfied customers. Having logistics prepared with tight backend reverse logistic processes can help protect against that and help the company insulate and protect itself from worse losses.
c) Aside from the answer given thus far, there are a few other areas that are worth bringing to the company’s attention. To start, a major theme in both answers was the importance of communication between different business units and partners, but we have not said anything about the role that IT plays in this. Given the importance of the launch and the complex interrelationship between various functions, it is important to have a solid communication platform that is consistent, shared, and reliable. Whether it be a SharePoint site or through an ERP platform, there should be practices and procedures set in place, from the start, to help govern and set the expectations of how parties communicate, where critical documents can be found, etc. It is one thing to just say “communication is important” but the relevant parties also need the appropriate tools to communicate.
Another area that has yet to come up is sourcing. Sourcing is obviously a major topic with any manufactured good, especially perishable ones, but obvious things are often the first to get overlooked so we must give it some attention. Yummy has both an aggressive and ambitious goal that needs to be supported at the front and back end; on the back end, they need to have contingency plans in place to help respond to any significant delays or disruptions that would affect their forecasts. The case does not indicate one way or another who their suppliers are and how they are organized, but Yummy will want to have connections with more than just one so that they can recover quickly if anything happens.
Finally, we should analyze the marketing strategy as well as the free gift scheme. One thing I would recommend is adding a social media element; while the marketing strategy is multi-channel, it has left out the most important channel today, digital media. The free gift strategy is a good gimmick for NPI though not something that is likely to be sustainable as the product penetrates the market deeper and deeper and more and more noodles are being sent out; so, it’s basic purpose is to incentivize purchase when the product first enters the market. To leverage the value of that scheme they will want a marketing strategy that doesn’t leave the biggest stone (i.e., the Internet) uncovered, so a social media strategy is most certainly necessary.