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Riverwood Solutions CIO Research Findings: Hardware is Back

Dallas, TXRiverwood Solutions, the innovator in managed supply chain services and operations consulting, today released survey results gauging CIOs' opinions on the current resurgence of hardware manufacturing. The survey found that CIOs attribute the recent resurgence of hardware manufacturing to the popularity of wearables and the Internet of Things. It has long been acknowledged within the technology industry that hardware is usually significantly more challenging to bring to market than is software, due to the complexity of manufacturing, supply, and geographic issues involved.  The current hardware resurgence puts an even brighter spotlight on supply chain issues that already are becoming a global challenge.

Respondents also believe that companies funded on Kickstarter and Indiegogo will have the lowest likelihood of successfully manufacturing and delivering their products on time.  CIOs agreed that companies funded by private equity, venture capital and incubators are most likely to launch on time.

Of the CIOs polled, 76 percent agreed that the recent resurgence in entrepreneurial interest in hardware manufacturing is likely a result of the public's interest in the Internet of Things. Fifty-two percent attributed it to the public's interest in wearables and 36 percent felt the resurgence is due to fact that it is cheaper to manufacture hardware than it has previously been.

When the CIOs were asked to weigh in on which funding mechanisms made them skeptical that a product would launch on time, 50 percent picked crowd funding platforms Indiegogo and Kickstarter, suggesting that CIOs have low expectations that fledgling entrepreneurs will be able to deliver hardware manufacturing projects on schedule. The next two funding mechanisms that inspired the least confidence among the CIOs surveyed were 'big brands' first foray into hardware' (20 percent) and 'family money' (17 percent). 

The CIOs surveyed agreed that manufacturing delays pose a significant threat to the potential viability of a given product and the long term success of a company. When asked what consequence a company would most likely face if it is unable to deliver a product on time and to scale, over half (54 percent) agreed that 'going out of business' was the most likely to occur.

“Most companies are funded on their vision – not on their hardware delivery strategy,” said Brad Knight, CEO of Riverwood Solutions. “But even the most brilliant vision is useless if a company can't deliver the goods.  There has been little hardware manufacturing over the last two decades, and now there's a 'hardware skills gap' at most companies.  A thorough and well-researched supply chain delivery strategy should be a critical requirement of funding any business proposal where hardware is involved.

Forty-six percent of the CIOs surveyed said most entrepreneurs optimistically believe they can bring a product to market in 6-12 months. When asked what is the most likely cause of manufacturing delays, 38 percent of the CIOs said it was because entrepreneurs go straight into manufacturing and 33 percent pointed to the fact that companies do not adequately pilot and test products.

“Navigating the supply chain, especially in a hot market like wearables, can be a nightmare,” said Mike Kasparian, CTO at Atlas Wearables.  “Riverwood has been critical to our success in connecting the dots, bringing a strong concept all the way through a complicated process to manufacturing a quality wearable.  Every crowdfunded product should seek their advice – the service pays for itself.”

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