Organizations love to make design changes to their products on a regular basis. Any firm producing a product, be it the Tesla Model S or McDonald’s French fries, strives to introduce incremental improvements to add new features, reduce costs, comply with the latest regulations, and remain competitive. Sometimes these changes have an impact on suppliers.
- Tesla just released its Version 8 software that introduces over 200+ enhancements for the Model S Autopilot technology. Some of these changes will have an impact on Tesla’s suppliers due to integration between purchased components and Tesla’s design.
- In 2008, McDonald’s formally announced it changed its recipe for French Fries by changing to trans-fat-free oil to address general health concerns over cardiovascular disease. Imagine the impact of this change to the supplier providing the trans-fat oil from a capacity, inventory, and profit standpoint.
The impact that design changes have on suppliers is significant. Let’s take … Read more...