If you create products (or run a business that does), it’s your professional and personal goal to create something everyone wants so badly that products fly off the shelves like Nintendo Wii’s at Christmas (and most of the year, actually).
There are countless examples of this kind of demand, including the Wii, XBox’s, iPhone, Tickle Me Elmo, and Cabbage Patch Kids to name just a few. Now we’re seeing the online equivalent of customers banging down the virtual doors of our servers and networks to get at products. Rockies world series tickets and Apple’s MobileMe service are examples where servers cratered over the demand by users within a very short time window.
A very recent example is the public-beta of Windows 7, the successor to the much maligned Windows Vista. Microsoft had to shut down their download servers and regroup on Friday as too many requests were coming over the gun walls, causing a bad experience for everyone trying to get new bits.
As a product creator I haven’t (yet) been fortunate to have that kind of success for a product. (But you gotta believe you’ve got that in ya :) ).
Limited Supply Can Be A Good Thing
In the recent Blackberry Storm SmartPhone product launch, much was made about the Storm being the device to knock the iPhone off the top of the leader board. While the Storm certainly didn’t do that, it was a very successful product launch. It’s no doubt by anyone there would be high demand for the Storm, but Verizon stores had limited supplies of them on hand the day of the product launch. The store I visited at 6am on a Friday morning only had an allotment of 30 Blackberry Storms. All stores only had a limited few phones, and before I left with mine in hand, other Verizon stores were calling the into the store I was in looking for more phones. The warehouse was out by days end.
Certainly Verizon and Blackberry anticipated high demand upon launch of the Storm. But did they purposefully limit the number of units available on day one to help keep demand for the Storm high and in the buying market’s mind? Or were they just being prudent and protecting themselves on the backside from an over supply if the product’s acceptance didn’t live up to the pre-launch hype. The only recent product I’m pretty certain has been purposefully kept in short supply is the Wii. There’s been a shortage of Wii’s (at least a perceived shortage) virtually since the gaming console came out.
It’s A Manufacturing Problem
Then there’s the “RAM factory burned down in Japan” or “manufacturing can’t keep up” situation. Now that’s something no product manager wants to have happen. The customers are there but the product can’t get to the customer due to manufacturing.
There’s a flip side to this dilemma too. At a training course (I think it was a Florida Power and Light Quality course, but I’m not sure) we played something called the “beer game”. No, it wasn’t a drinking game like you’re thinking. It was to show how decisions in the supply chain can run afoul. You come out with the hottest new beer on college campus’ but no one anticipated that outrageous demand you’re seeing. Beer isn’t like CDs, you can’t just stamp out more… it takes time to cook. Long story short, folks in the supply chain start over ordering attempting to raise their position in the queue, and fill demand for beer money that’s been left on the table, and then… demand suddenly drops off, that beer's not in vogue anymore. Suddenly everyone’s cancelling orders and sitting on more product than they know what to do with. It was a very enlightening scenario, which emphasized the need for systemic thinking.
Note: I always tell clients and friends I coach about blogging and social media to keep it short, three paragraphs or so. With that in mind, I’ll break this up in to more than one post.
To be continued…
