Wednesday, 17 January 2007

Gibson HD 6X Innovation vs Supply Chain


Happening right now in Anaheim is the NAMM show (http://www.thenammshow.com/). NAMM is an internationally renowned music industry trade show for music manufacturers. No doubt NAMM will showcase many exciting new products from those presenting at the show, some of those products will probably represent use of the latest cutting edge technology and product innovation. While innovation is what keeps businesses secure in the long term, It’s worthwhile considering the impact on the supply chain of new products, especially those showing a significant level of design change.

A good case study for this is the new Gibson HD 6X Pro which will be shown off at NAMM. Gibson claim that this is the most revolutionary leap forward in guitar manufacturing in 50 years. Gibson (www.gibson.com) have been making guitars for over 50 years and have numerous manufacturing plants dotted around the world and are one of the most renowned guitar manufacturers. If you look at the industry itself, the guitar itself has more or less remained fairly static for many years with the basic premise consisting of a small set of commodities – i.e. wood, electrical components, plastics, chrome etc all coming together on the production line or craftshop to form the final product. With increasing competition (from the far east) Gibson has a need to differentiate itself.

Gibson’s new HD 6X Pro guitar mixes traditional guitar manufacturing “hand oiled mahogany neck, smooth frets, classic humbuckers for traditional tone” with ultra modern technology which allows the output (which Gibson call Hex output) of each string to be digitally processed as Gibson state on the website, “Imagine using six guitar amplifiers – one for each string – or recording six strings individually onto a computer”.

The Gibson HD6X with it’s use of modern electronics is certainly innovative with the way it embraces modern technology. This builds on a shift within the industry that has in recent years seen manufacturers like Line 6 enter the market which was once relatively low technology and dragging it into the modern era of consumer electronics. The Line 6 Variax can impersonate the sound characteristics of a multitude of guitars and has, unsurpringly, some complex electronics and materials inside.

From a components point of view Gibson have added a number of new components to the traditional make up including new controls, pickups, electronics, outputs. The HD6X also ships with it’s own special set of strings and therefore there is a supply chain dependency for through life support of the product.

Clearly then products of this type indicate somewhat of a departure from the usual fare. But what does this mean to the likes of Gibson’s supply chain. Well, as products get more innovative, supply chains need to evolve to keep pace. First off new components may need new suppliers, new storage conditions, different skill sets and technical know how within it’s purchasing community. Through life support of the product may radically change resulting in new repair schemes, different spares requirements etc. A radical change in products may need a quantum shift in the company – suppliers in new geographical areas. Innovations can mean a requirement for whole new skill set within the purchasing community – take Gibson’s shift from relatively old school commodities to high end electronics. Without a doubt it’s supply chain has had to adapt to compensate for this shift.

Clearly the biggest assistance that Supply Chain can get is advanced warning and time to react. The musical instrument industry is not unique with innovating it’s products but a substantial innovation (or complete re-design) can wreak havoc with existing supply chains, sometimes requiring completely new complimenting supply chain strategies. The old adage therefore of design and Supply chain requiring a close working relationship remain truer today than it’s ever been. Given the change that product innovation can inflict on the supply chain – radical innovation can be a risky road to follow - but the rewards of being a successful early adopter can reap huge rewards.

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