Lean launch: Managing product introduction risk through response-based logistics

New product launch research had identified four strategic issues that invol ve activities essential to introduce a new product to its target market. Th e sum of these decisions is critical to new product success. Substantial re search has focused on decisions guiding the proper product, price, and prom otion mix to favorably impact market goals. Considerably less research has centered on determining how place capabilities such as logistics and supply chain relationships impact launch performance. Logistics and supply chain collaboration-the processes involved in planning , implementing, and controlling the efficient, effective flow and storage o f goods, services, and related information from the point of origin to poin t of consumption for the purpose of conforming to customer requirements-can greatly reduce risk associated with new product launch. They combine to pr ovide a structure to facilitate rapid response to developing demand by loca tion and intensity. In this article, an effort is made to fill the gap in e xtant knowledge regarding new product launch strategies by reviewing releva nt literature and comparing traditional launch strategies based on anticipa tory demand forecasts with alternative lean launch strategies based on the principles of response-based logistics. The result is a lean launch model f or continued empirical testing and managerial review. The article contrasts traditional logistics support of new product launch w ith an emerging logic called lean launch strategy. The traditional launch s trategy is forecast driven and is based on anticipatory logistics (push). T he lean launch strategy is formulated on principles of postponement and is based on response-based logistics (pull) and supply chain management. Respo nse-based logistics systems provide flexibility that enables better managem ent of inventory levels. Improved replenishment times and in-stock availabi lity of products from a centralized inventory allows managers to rapidly re act to actual demand. Lean launch also can cut losses in product launch fai lures by reducing launch inventory exposure. Finally, lean launch can impro ve chances of new product success by helping limited volume technical succe sses achieve profitability. (C) 1999 Elsevier Science Inc.