The term “supply chain” was relegated to the manufacturing and shipping industries before the lockdowns forced by COVID-19 in 2020. Many global markets remain squeezed because of lingering restrictive mandates. These global supply routes between customers and suppliers are crucial for transforming raw materials — whether they be steel or computer chips — into the new products that are stocked and sold.
“There were hopes that supply-chain issues would start to abate in the first half of 2022 as the effects of the pandemic became contained in more countries,” reports financial researcher Morningstar. “But other events, such as the war in Ukraine, have added new bottlenecks. And with lockdowns in Shanghai and other key cities across China, pandemic-driven snags are hurting supply chains again.”
In the security industry, vendors that supply access control panels and additional systems-relevant equipment are feeling the crunch.
With these issues in mind, Locksmith Ledger recently discussed new products with three industry executives: Alex Housten, president of dormakaba Americas Region; David Price, vice president of communications and business development at Camden Door Controls; and Peter Boriskin, chief technology officer for ASSA ABLOY Opening Solutions Americas.
Q: Supply-chain issues delayed or choked off some new-product releases in the industry but not yours. How was your company able to buck the trend to release new products in 2022?
Alex Housten: One of the most common considerations in today’s environment is how to protect or proceed with new-product development. For dormakaba’s product portfolio, there has been minimal effect in this area.
Our product roadmap contains a multiyear vision, and we’ve made steady progress on that despite localized supply challenges. We have highly disciplined sourcing practices that allow us to anticipate and withstand challenges to our critical path. We’ve been able to work with our network of suppliers to navigate around these issues. In addition, we made investments in inventory to protect key programs across our business. The result is that nothing has suffered significantly because of supply issues.
David Price: Although supply-chain issues have created product shortages — and continue to create product shortages — we have been able to limit the severity of this because of our smaller size and dedication to North American design and manufacturing. Being smaller means that we can pivot quickly to the new reality. Having a foundation of North American design and manufacturing means that we have much more flexibility in sourcing alternate vendors and change product components quickly if necessary.
But the volume of new-product introductions that Camden will be releasing in 2022 is mostly the result of our huge investment in new-product development that started way before we became aware of supply-chain issues. The size of that investment enables Camden to “hit above our weight” in the number of new products we will bring to market but also in the quality, innovation and value that those products will provide.
Peter Boriskin: It isn’t that we’re immune to supply-chain issues. We just have ways to respond and adjust that are unique to our company. Although we might have challenges in the supply chain in one area, it might not apply to every area. There always is a good mix and tremendous amount of mechanical, electromechanical and software innovation underway at ASSA ABLOY, so we can adjust our efforts based on where work is possible. Our teams are able to innovate in various aspects and get creative with certain parts based on the stage of development.
For example, with the types of challenges with electronics many folks had, particularly early on, we were able to shift and launch a lot of mechanical innovations relating to things, such as status indicators for our locks and solutions for gender-neutral bathrooms, school security and other applications. When mechanical prices rose, we looked at sustainability. You might not typically think of this in the face of supply-chain issues, but when you dematerialize a product, it reduces material, labor, cost and the carbon footprint for a product. These are benefits that extend beyond the supply-chain issues. Our sustainability goals and initiatives not only make a positive effect on sustainability, but they also improve the resilience of our business.
Q: How has the full return of trade shows affected your marketing of new products compared with the previous two years? What changes that you made during that time enhanced your efforts this year?
Housten: What we’ve observed in 2022 is pent-up demand for in-person experiences typically associated with trade shows. dormakaba didn’t abandon trade shows over the past two years. In fact, we exhibited at ISC West 2021 and showcased many new products, because we wanted to demonstrate boldly our support for the security industry. Our booth at that time — and in shows since then — remains a full-on immersive experience. Trade shows aside, we expanded our definition of “in-person” engagement over the past two years to adapt to the unusual circumstances dictated by the pandemic. In early 2021, we opened a state-of-the-art Customer Discovery Center in Indianapolis, our Americas Region headquarters. This is an interactive space that engages guests in hands-on, technology-driven, collaborative activities and accommodates tours, training and other similar experiences. We also opened our Connection Studio, a dedicated broadcast studio that allows us to produce and broadcast live or recorded events. Both of these additions complement our trade-show exposure by enabling us to connect directly with customers virtually or in small groups.
Price: This question is so important and complex. Locksmith Ledger could host a roundtable just on the changes to sales and marketing that are a result of COVID 19 and new information technology.
When I talk with salespeople, I hear a tremendous sigh of relief that things are “finally back to normal.” The picture from a marketing and communications perspective is almost the exact opposite. A lot of books are being written and a lot of boardrooms have this as their top agenda item, because the landscape has changed completely — with an equal measure of risk and opportunity being recognized.
I see the effect on our trade-show strategy being mirrored widely in the industry. That change is that although we continue to invest significantly in trade shows, we aren’t investing as much and no longer view them as essential to increasing our market share.
We have learned that internet-based communications media, specifically video-based webinar events, can replicate much of the exposure and “connectivity” that once was reserved for trade shows, and that we also can use that technology to increase the reach of live events way beyond the show floor, should we decide to participate.
Boriskin: It’s great to be back meeting face-to-face again. It’s an excellent opportunity for us to connect with customers and better understand their concerns and priorities.
During the pandemic, we discovered tools and best practices for connecting with others when in-person meetings aren’t possible or practical. Now that we have resumed in-person trade shows and events, we’re able to continue using these tools to complement our efforts.
For example, live streaming allows those who can’t travel because of scheduling conflicts or budget limitations to access information they wouldn’t otherwise be able to see. Video recordings can be made available post-show to allow people to rewatch or share sessions after they’re back in the office. Other digital content can be used to reinforce messaging and increase engagement post-show. Going forward, I believe we will continue to use digital strategies to enhance live events.
Q: What challenges remain, and what lessons did you learn from your latest releases that will help to guide you with future new-product releases?
Housten: The products we provide have an essential purpose — security. They must be trusted, and that’s a long-term proposition. We’ve always taken a multilayered approach to new-product development that includes significant feedback from our channel partners. We’re 100% committed to supporting our channel partners, and all products must respond to real or anticipated marketplace demands. As part of our process, we identify some early-launch partners and match them with specific projects and use cases where we can receive trusted feedback. This feedback allows us to react accordingly to any areas that require attention.
Building channel acceptance to new products takes time. Working together, we’re able to make product introductions successful. The only change we’ve made to our overall process is to add critical digital infrastructure, so we can use technology to do more things remotely or in a virtual environment.
Price: Like many companies, we’re in a race to understand how best to harness the potential of digital marketing and how to effectively integrate that digital component into the “real world” of our sales and customer care staff. I would have to say that the lesson that I have learned from all of this is that each product launch is a new opportunity to learn how to launch products better.
Boriskin: You must be flexible and resilient as an organization. These are things we need to continue to build into our products as we look at materials and different ways of working.
If we look into the future, this likely won’t be the last time we talk about the supply chain. How can we as an organization be more resilient and ready to respond more effectively to those changes moving forward? Can we design products that are more resilient to changes in the future? There are lessons we’ve learned and likely will incorporate as we look ahead.
Another point I want to make is about platform over product. If you look at our mechanical platforms, we aren’t just designing a bunch of similar products in this space; we’re developing platforms. We’re putting together electromechanical platforms and electromechanical firmware platforms that we can build multiple products upon to leverage the breadth of our capabilities. By addressing challenges and making enhancements in a platform, all the products that are part of it benefit, and updates are much more scalable.
Q: What’s the one thing that keeps your executive product management team up at night and why?
Housten: At times, we face scarcity of production and capacity for components, etc. As a result, even good suppliers we’ve trusted for years have had occasion to call and say they can’t deliver for us or that a price now is dramatically different than expected. This is a concern, because we have commitments we’ve made to customers that we have to keep, both for availability and cost of products.
We don’t like to lose sleep, so we fight these situations with intensity by being highly proactive. Our team has reserved some capacity to manage these situations with urgency. I firmly believe that we can win in current and future states if we’re persistent on a sustained basis rather than standing in line.
A few best practices have emerged that apply to our customer and supplier relationships:
- Prioritize maintaining and building customer trust over unsustainable short-term growth.
- Nurture relationships with trusted partners committed to ongoing business vs. simple point-of-sale experiences.
- Expand our supplier partnerships to overcome the scarcity challenge.
- Prepare for potential disruptions in inventory stock and other things outside of traditional ranges.
Price: External factors, such as the economy, certainly come to mind, but we can’t alter that threat beyond risk management. Internally, our biggest challenge has been, and continues to be, how we manage large growth while also maintaining our low manufacturing defective rate and fast shipping times.
We’re moving our business to a new headquarters, manufacturing and warehouse facility in September, doubling our square footage, and there will be a lot of people at Camden who will be missing sleep because of that.
Boriskin: The primary question that keeps us up at night is, “What’s going to happen next?” We have to continue to evaluate how we do business, anticipate the next potential challenge and address areas we might have missed. As we look at business and product resilience, what else can we do to be more prepared for future challenges? How can we plan, and what we can think about as we look at sustainability going forward? How might we be able to improve on the role that sustainability plays in our products, organization and manufacturing?
If we can reduce our carbon intensity, then we can reduce material in a product and stretch that material to make more products. If we can reduce the effect of costs, then we don’t have to increase prices to the level others have had to. That helps us to stay competitive. It also helps us to build high-quality products in a historically higher cost country and do so in a way that’s competitive with the rest of the world. It's all about sustaining our business and being resilient so we can help our customers do the same.
