The demand for smart products is growing to previously unimaginable levels. For example, the recent IDC Quarterly Smart Home Device Tracker stated that worldwide shipments of smart home devices alone would surpass 1.4 billion units in 2025 with a five-year compound annual growth rate (CAGR) of 12.2%. Simply put, any physical product that can be enhanced with connectivity likely will be in due time. However, for many companies, the demand for smart products is growing beyond their capabilities to produce them. 

One of the most common challenges to successful smart product development and launch is the disconnect between the software teams that develop connected components and those tasked with manufacturing the traditional physical product. It is often a case of the left hand not knowing what the right hand is doing—or how and when it’s doing it. This lack of coordination leads to launch delays, costly mistakes, recalls, and unsafe products to the market, potentially impacting brand reputation and eroding consumer confidence.

To fully enjoy the ROI that smart product manufacturing can yield, manufacturers are recognizing and overcoming five common obstacles that prevent the ‘smart’ and ‘product’ sides from working in a cohesive manner: alignment, governance, predictability, visibility and risk control.

Obstacle 1: Misalignment between physical product teams and digital development teams 

Competing rhythms, cultures and methodologies between physical and digital product engineering and development lead to friction, delays and higher production costs. The direct line between smart product strategy and execution is broken at the operational level.

The solution: The product realization process for smart, connected products requires alignment between departments, especially physical product development and software development. Allow each functional group to work the way they want to work while harmonizing deadlines, outputs and KPIs.

Obstacle 2: Agreement on decision-making rules

The entanglement of multiple functions can leave governance unclear, resulting in conflicts of interest, power imbalances, high costs of restarts, and a lack of visibility into the smart product lifecycle. 

The solution: Establish a best-practice innovation management framework, ensuring it’s clear who is responsible for what, the status of each facet of the development process and whether the launch is on track. For large manufacturers, an enterprise innovation management software, which is the face of your framework, can automate new product development (NPD) processes and increase transparency for confident decision making.

Obstacle 3: Meeting launch deadlines

Meeting market and customer needs for smart product realization requires a predictable, efficient product development process that transcends disciplines and corporate hierarchies. Manufacturing plants cannot plan robust investments in new product lines if there’s a lack of predictable designs, timelines and more. Similarly, product lines can’t reasonably predict future sales and revenue if launches are unsure and the scope of the product changes during the process.

The solution: Conduct comprehensive product line planning, tying together market segments, regions, needs with the realization of features, products, and assembly. With an established innovation governance framework in place (see Solution in Obstacle 2), it’s clear if in-flight and future products are on track to meet established deadlines.

Obstacle 4: See and manage product and feature data across disparate tools 

Product owners are faced with disparate data and no way to leverage it for a better understanding of market segment needs. They have an incomplete picture of the consequences created by delays at the feature/project level within the product portfolio. Therefore, they can’t know what’s going on behind the feature development doors, including functionality, scope, delivery timing, costs, and resource needs.

The solution: A “single source of truth” is needed to gain cross-organizational agreement on product investments, launch timelines and revenue expectations while coordinating physical and digital teams, product engineering and manufacturing, and third-party suppliers – all using different methods and systems. When all relevant data is visible in one place, it’s easier to respond sooner to the impacts of changes and delays.

Obstacle 5: Combine different ways of working with financial and risk management controls 

Disconnection in the smart product development process can bring costly mistakes, recalls, and unsafe products to market. It can impact brand reputation and erode consumer confidence in a company’s products. A lack of familiarity with the requirements of and the regulations governing each function can make this problem worse, with potentially disastrous results.

The solution: Put an effective process of accountability in place at every stage of the product realization process. Distribute decision-making across the entire innovation chain, not just manufacturing or engineering.

Clear communication and accountability are non-negotiable aspects of successful smart product development. The market expectations are too high to allow blind spots that can delay launches or, even worse, compromise the quality and safety of products. Companies that implement solutions and policies that promote department-to-department transparency are the ones that will enjoy market differentiation and long-term success.