While the concept of the critical path may be simple, there are a number of steps along the way. The critical path consists of all the steps it takes to get your product or service to your organization’s customers. No matter the industry, the path is strikingly similar from organization to organization.
Let’s look at an example that will illustrate the steps required. Say that your company makes food products, such as noodles and pasta. The top decision makers, after researching the market, decide that customers desire a new product—gluten-free spinach linguini noodles.
Critical Path: Value Chain
R&D — The R&D Department will try out different ingredients and recipes till they land on a non-gluten spinach noodle that they believe will appeal to a large set of customers. Then they will test it out on customers till they find a product that meets the customers’ preferences.
Production — R&D hands it off to the Production Department to make and package the noodles to R&D’s specification in a cost-efficient manner.
Sales & Marketing — With a product on hand, the Marketing and Sales Departments will find retail-customers who want it, such as grocery stores, restaurants, and maybe directly to ultimate consumers. Then, they figure out the best way to price and sell the noodles to those customers.
Delivery — Once the orders come in, the Delivery (or Shipping) Department must determine the best way to get the noodles to the customer in an acceptable manner.
Customer Support — Finally, the Customer Support Department will be on hand for any customer issues and resolve them to the customer’s satisfaction. They might also follow-up with customers to seek feedback about both the noodles themselves and the customers’ experience dealing with the company.
As noted above, this critical path often begins by determining what product or service the organization believes will attract enough customers to buy it. This process often involves people all along the critical path, such as R&D, Marketing and Sales, and Customer Support. Collectively, they will make the product/service decision.
After that, the process often becomes linear where R&D hands it off to Production, etc. But once you get enough customers and a range of product offerings, your organization will be doing all the above functions simultaneously. Some new products will be in the R&D stage while existing products are being produced, sold, and shipped.
Critical Path Action Items
What does your company’s critical path look like?
Are you on your company’s critical path? If yes, what part?
If you are not on the critical path, how are you connected to it?