Is your approach to product development helping you compete or holding you back?
Product development teams today face growing pressure to respond to market volatility, supply chain disruptions, and global competition. At the same time, they’re dealing with long-standing challenges like manual inefficiencies, poor collaboration, disconnected systems, and workforce shortages. These issues cause costly delays, especially during engineering-to-manufacturing hand-offs. In the past, these inefficiencies were tolerated. But today’s market demands more agility, and the tools to support it are finally available. Advances in digitalization, simulation, and AI are helping teams move faster and smarter. These issues are shaping product development.
The research identifies seven trends that are reshaping product development as companies confront this new reality. Top Performers are leading the way in adapting to these trends to gain a competitive edge. What are they doing differently, and what can others learn?
This study is based on a survey of 233 professionals involved in product development across design, engineering, and manufacturing roles. The findings reveal the biggest challenges teams face today, the trends driving change, and the strategic moves Top Performers are making to reduce risk, accelerate innovation, and deliver better products faster.
Please enjoy the summary* below. For the full research, please visit our sponsor Dassault Systèmes SOLIDWORKS (registration required).
Table of Contents
- Executive Summary
- Why Product Development is Under Pressure
- Top Challenges Facing Product Development
- Identifying Top Performers
- 1. Rebuilding Supply Chain
- 2. Connecting Design-to-Manufacturing
- 3. Embracing AI in Product Development
- 4. Expanding Simulation
- 5. Addressing Talent Shortages
- 6. Unifying Tools Through Integrated Product Development Platforms
- 7. Adopting Agile Strategies
- Recommendations
- About the Research
- Acknowledgments
Executive Summary
State of Product Development
Product development continues to face an era defined by growing complexity, shrinking margins for error, and accelerating market demands. This is exacerbated as companies are under increasingly pressure not only from traditional competitors, but also from nimble startups, vertically integrated disruptors, and offshore manufacturers. At the same time, they must manage ongoing supply chain volatility, shifting customer expectations, and a growing need for smarter, more connected products.
To remain competitive, companies must design faster, adapt to change more easily, and eliminate costly inefficiencies. Yet many are still burdened by manual tasks, disconnected tools, and poor collaboration, especially between engineering and manufacturing. These challenges are not just frustrating for employees; they lead to missed deadlines, higher costs, and compromised quality. In fact, 78% of respondents report increased manufacturing and development costs due to product development challenges.
Key Findings
Top Performers, companies that consistently meet or exceed product development goals, are leading the way. Compared to Others, they are:
- 77% more likely to use fully or mostly integrated product development platforms
- Nearly two times more likely to be using AI in development
- Significantly more likely to involve design engineers in simulation and to support supplier collaboration with real-time data
Top Performers aren’t just adopting new technologies; they’re redefining their processes to reduce risk, speed innovation, and build resilience.
About This Report
This report analyzes the current state of product development and examines seven key trends revealed by the research that are reshaping how companies approach product development. These trends include the shift to integrated platforms, greater use of simulation and AI, stronger design-to-manufacturing alignment, and strategies to engage the workforce and collaborate with suppliers.
This report also examines workforce dynamics, including the impact of manual work on motivation and generational preferences for recognition and growth. It concludes with actionable strategies companies can use to modernize their development approach and gain a lasting competitive edge.
Why Product Development Is Under Pressure
Today’s Market
Product development has always been complex, but many companies are feeling more pressure than ever before. They are navigating a perfect storm of disruption, driven by market shifts, increasing technical complexity, and organizational misalignment. As a result, engineering and manufacturing teams must achieve more with less time, fewer resources, and greater risk.
A New Wave of Competition
Adding to the pressure, competition is coming from all directions. In addition to long-standing rivals, companies now face other sources of competition (see graph). With competition intensifying, businesses must move faster and differentiate through innovation, product performance, quality, and customer experience. As competition arises from various fronts, companies need to work harder to set themselves apart. Strong product development is essential for achieving that differentiation.
How to Respond
Given these challenges, companies should evaluate the top obstacles facing product development teams and address them to empower them to deliver effectively. While many operate under the belief of “if it ain’t broke, don’t fix it,” they may underestimate how much these common challenges can harm the business. Thankfully, technological advancements have created new opportunities to overcome these challenges and develop efficiencies that can enhance a company’s competitiveness.
Identifying Top Performers
How Top Performers Were Defined
To define Top Performers, Tech-Clarity identified the top 25% of companies that outperform their competitors in metrics that indicate product development success. These metrics are the ability to:
- Develop products efficiently
- Design high-quality products
- Develop innovative products
- Meet product cost targets
- Meet release deadlines
Top Performers excel in these areas, which indicates greater overall business success. To identify best practices, we analyzed what Top Performers do differently compared to Others.
Top Performers’ Advantage
Top Performers have more effective product development practices than their peers. In fact, they are 69% more likely than Others to easily collaborate and share data across disciplines and departments. This makes them 61% more likely to manage hand-offs to manufacturing extremely well and 54% more likely to meet customer expectations.
Top Performers’ Approach
Let’s examine the seven trends shaping product development and how Top Performers are responding to overcome today’s top product development challenges.
Recommendations and Next Steps
Based on industry experience and research for this report, Tech-Clarity offers the following recommendations for product development teams:
- Integrate disconnected tools: Consolidate design, engineering, and manufacturing systems into a unified platform to reduce errors, rework, and delays. Top Performers are 77% more likely than Others to use a fully or mostly integrated product development solution.
- Eliminate manual tasks: Automate repetitive, low-value work to boost productivity and allow engineers to focus on innovation. Overall, 61% of respondents cite manual tasks as the most demotivating part of their job, prompting 48% of Top Performers to implement a strategy to automate manual tasks.
- Strengthen design-to-manufacturing collaboration: Align teams with shared, real-time data to improve communication and reduce costly hand-off errors. Sixty-five percent cite miscommunication between design and manufacturing as a top cause of delays, and 73% of Top Performers have strategies to align engineering and manufacturing.
Expand simulation usage: Use simulation earlier and across more roles to cut physical prototyping, identify issues sooner, and improve design quality. Seventy-four percent of Top Performers use simulation to optimize performance.- Embrace AI and automation: Invest in AI tools, especially generative AI, to accelerate ideation, improve accuracy, and reduce manual workflows. Top Performers are nearly twice as likely as Others to use AI during development already.
- Prepare for workforce shifts: Make engineering and manufacturing roles more rewarding by reducing frustration with manual tasks, recognizing contributions, and offering growth opportunities tailored to generational preferences. Forty-eight percent say hiring and retaining technical talent is a top challenge, making it critical to keep existing staff motivated.
- Support supplier collaboration: Share real-time data with local suppliers to reduce miscommunications, rework, and delays. This will help you adapt to supply chain shifts and nearshoring trends. Respondents say supplier collaboration issues add 30% more time to their development cycles. Avoiding these issues will improve productivity.
*This summary is an abbreviated version of the ebook and does not contain the full content. For the full report, please visit our sponsor Dassault Systèmes SOLIDWORKS.
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