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Time-to-market: definition and important aspects for procurement specialists
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Time-to-market in a nutshell:
Time-to-market describes the period from the initial product idea to the successful market launch of a new product or service. Optimizing this period is essential for purchasing, as fast and efficient procurement processes and strategic supplier selection create decisive competitive advantages.
Example: A car manufacturer reduces the time-to-market for a new vehicle model from 48 to 36 months by involving strategic suppliers in the development process at an early stage and carrying out parallel procurement activities, thereby securing a lead in the market segment.
Contents
What is time-to-market?
Time-to-market (TTM) refers to the period from the product idea or development to the market launch of a product or service. In an increasingly competitive market environment, a short time-to-market is crucial for gaining market share, meeting customer needs promptly and gaining a competitive advantage. A fast market launch enables companies to set trends rather than just follow them.
Core elements of time-to-market
Importance of time-to-market in purchasing
Time-to-market plays a key role in procurement management, as purchasing directly influences the speed at which products can be brought to market. Effective supplier management and early involvement of purchasing in development processes can reduce procurement times and avoid bottlenecks. This leads to faster time-to-market for products and strengthens the company's competitive position.
Time-to-market: from traditional development cycles to agile methods
Based on the understanding that time-to-market is crucial for the market success of a product, it becomes clear how important efficient process costs are. In practice, this means that companies must continuously optimize their development and production cycles in order to remain competitive. Traditional, often lengthy product development is contrasted with modern, agile methods that enable a faster market launch. The need to adapt to dynamic market changes has driven the shift from traditional to agile processes.
Old: Traditional product development
Traditional approach: In traditional product development, the process is sequential and rigid. Each phase - from brainstorming to requirements management to market launch - is carried out one after the other and without overlap. Typical tools are the waterfall model and extensive requirement specifications. The main characteristics are long development cycles, low flexibility and low adaptability to changes in the market or customer requirements. The main challenges are delays due to silo thinking, communication barriers between departments and late recognition of problems, which significantly increases the time-to-market.
New: Agile development processes
Agile Methods: The modern approach relies on agile development processes that focus on flexibility and speed. Through iterative working methods and interdisciplinary teams, development phases are parallelized and bottlenecks are minimized. Tools such as Scrum or Kanban enable continuous adaptation to market changes and customer feedback. Daily stand-ups, sprints and regular retrospectives are key innovations. Practical benefits can be seen in a reduction in development time of up to 40%, higher product quality through early testing and improved teamwork. This leads to a faster market launch and a considerable competitive advantage.
Practical example: Electronics industry
A leading electronics manufacturer wanted to shorten the time-to-market for its smartphones in order to be able to react more quickly to technological trends. By introducing agile methods, the development time was reduced from 18 to 10 months. Cross-functional teams worked simultaneously on hardware and software, and regular market analysisn flowed directly into the development process. The result was not only a faster market launch, but also a 25% increase in customer satisfaction and a 15% increase in sales in the first quarter after the product launch.
Conclusion on time-to-market
Optimizing time-to-market is a critical success factor in today's business world. By efficiently combining agile methods, digital tools and strategic supplier integration, companies can significantly shorten their time-to-market. Purchasing plays a key role in this by optimizing procurement processes and being involved in product development at an early stage. Only those who continuously improve their time-to-market can remain competitive in the long term and make the most of market opportunities.
