Materials Are Part Of Your Business Strategy
A CEO’s job is to lead the company and ensure that big decisions support long-term growth. At first glance, this responsibility seems to exist in the realm of finance and executive hiring, but it also includes managing decisions that determine how a company produces and delivers its products. Production materials have a significant impact on a variety of key factors like cost, supply availability, environmental impact, brand reputation, and customer satisfaction. Since chosen materials shape a company’s ability to stay competitive, CEOs should be involved in the design and procurement of those materials to support the overall business strategy.
Materials impact the business model
The materials used to manufacture a product will affect how it gets priced, shipped, used, and returned. It’s not a decision that should be made on the basis of price alone. Material choice should align with and support a company’s long-term strategy. Making products with inconsistent materials can hurt equipment and disrupt production schedules, leading to lost customers and contracts.
When a company selects product materials based on cost or convenience alone, it often ends up costing more over time. On the contrary, high-priced materials sometimes cost less per finished unit when there are fewer rejected products.
Products made with high-quality materials are less likely to generate warranty claims and returns. Poor quality materials, on the other hand, tend to produce more returns and claims after failing to survive customer use, and that eats into profits.
It’s critical for companies to consider how low-quality materials might impact their reputation. Products that fail will weaken customer trust even after defective products are replaced. Premium products can command a higher price point from the start as long as customers understand the value.
Instead of approaching material selection as any other expense that can be reduced arbitrarily, CEOs should be focused on providing value to the customer first. This requires choosing materials that make the end product more appealing to customers. For example, customers often value durability, comfort, aesthetics, and ease.
Suppliers need to be part of product development
Getting suppliers involved in product development is something CEOs should be doing whenever possible. Nobody understands how material behaves, its limitations, and what alternatives exist better than suppliers. Before settling on factors like dimensions, tolerances, and finishes, it helps to ask suppliers to review concepts first and make suggested adjustments.
Suppliers can provide a company with any material asked for, but when they know what a product must accomplish, they can guide the material selection more appropriately. For example, raw ceramic materials are not all the same, and each type is best suited for different applications. A company might order raw materials based on cost, not knowing there’s a better option or the option they initially chose has serious limitations.
Another benefit of discussing product development with suppliers is being able to create shared goals for cost and lead time. Depending on the product, some companies provide suppliers with rewards for contributing their engineering expertise and original ideas. This turns sourcing materials into a collaboration rather than just a purchase.
Materials influence company resilience
Relying on specific resins, metals, fabrics, chemicals, or other components can be risky. If those materials become unavailable, it can create prolonged downtime. CEOs who get involved in the process of selecting materials have the opportunity to shape decisions that create redundancy and viable alternatives. When there’s no alternative for a critical material, that’s a recipe for disaster. CEOs who source and test substitute materials before a shortage and have a list of additional suppliers prior to an interruption make their companies more resilient.
Materials are connected to brand value
Customers judge product quality by things like texture, weight, sound, durability, and even the packaging. Sometimes factors like sustainability and social responsibility become factors. It’s important for CEOs to ensure that the product matches the promise. For instance, a rugged brand needs to use materials that feel durable even during normal use.
With packaging, presentation and material choice matter. Everything should look like it has been carefully engineered, including how the box opens, how the product sits in the box, and how easy it is to remove. The unboxing experience creates a first impression that will shape how customers judge quality. When materials match a brand’s promise, customers experience the value directly before they’ve even used the product.
Material selection requires leadership
Materials can either make or break a brand’s promise. They shape how customers experience product quality and value while influencing brand perception. For that reason, sourcing materials shouldn’t be treated like a routine purchase. It’s actually a leadership decision. By evaluating material choices and involving suppliers in product development, CEOs can improve quality, support innovation, and manage risk for more profitable growth.
