Why Manufacturers Should Care About Agile Product Development

Written by: Colin McMahon

Read Time: 6 min

Agile product development has reached an inflection point. Already the dominant method of creating and releasing software, now more and more hardware manufacturers are debating Agile philosophy for their workflows, and still many more have likely adopted Agile principles without realizing it.  

Yet for all the progress, numerous hesitations remain. For many, developing hardware like software sounds too good to be true. Yet these manufacturers should take note, there already exist numerous reasons to care about and embrace Agile product development.  

In this blog, we will focus on four key reasons why manufacturers should embrace Agile product development. Keep in mind, these are not the only four reasons to adopt Agile design philosophy, merely highlighted excerpts, which include:  

  1. To enhance their distributed work collaboration capabilities 
  2. To attract and retain the best talent
  3. To increase internal transparency, thus reducing the risks of product development
  4. Most importantly, manufacturers should embrace Agile product development because they cannot assume their direct competition will not

Before we further explore these insights, let’s first lay some groundwork. Just what is Agile product development and how did it gain so much in popularity?  

The Principles of Agile at a Glance  

Agile has been gaining prominence for decades but was first truly compiled and understood in 2001, when 17 software developers met to discuss improving development strategies. That is where the Agile Manifesto was written, a comprehensive document that outlines 12 key principles and four core values of Agile product development. At inception, it was only intended for software.  


Agile prioritizes open communication, frequent collaboration, and mandated project management. It reconceptualizes development from the indeterminant stages of Waterfall product development to specifically agreed upon developmental stages called sprints. These sprints, which can range from days to months, are all about focusing on and accomplishing certain, preset tasks. Thus a project, even a complex undertaking, can be broken out into easily understood and measurable objectives.  

If this sounds like it would be applicable outside of software, then don’t be surprised to learn that, in the 20-plus years since its initial outlining, the principles and values of Agile have not only dominated the software space, but spread far beyond.  

Agile product development is simply using the principles and core values of the Agile Manifesto in the realm of physical product manufacturing. Now that we’ve outlined the principles and philosophies of Agile product development, let’s look at how they’re applicable and why manufacturers should be taking notice.   

Becoming a Flexible, Distributed Company 

Organizations were moving toward remote work at a near glacial pace, and then the COVID-19 pandemic. Suddenly, manufacturers had to deal with having engineering and design team members needing to work together, despite not being in the same place…or did they? While the pandemic did force a shift toward distributed work, the actual truth is that many manufacturers – especially larger organizations – have been distributed for decades. For example, CAD engineers rarely work on the assembly floor alongside managers and frontline operators.  

The largest workflow development in the past few decades was not the abrupt arrival of the pandemic but the slow, gradual rollout of online, digital technologies. SaaS and cloud solutions, in particular, provide the framework to make seamless, efficient distributed workflows not only possible but commonplace.  

It would be optimistic to think that the pandemic was a once-in-a-generation event but, in this changing climate, can organizations take that chance? The strongest competitors going forward will be organizations built to bring people together in the most efficient ways possible, not bound by older infrastructure that was built before the tools to be effectively distributed even existed.  

Attracting the Best Talent 

Moving to Agile has another benefit: attracting and retaining talent. Since Agile is the philosophy of the flexible work environment, it stands to reason that anyone who enjoys flexible working will be more open to embracing Agile – and many employees want to work that way. Research from McKinsey alone found that 87% of US employees took remote work if it was offered. For the younger generation (specifically Gen Z), this gets more important. Data gathered by GOBankingRates found 56% of Gen Z respondents stated they wanted or needed to work outside a traditional office environment. To clarify, 27% of the 1,000 Gen Z respondents stated they viewed remote work as a necessity, not a perk.  

Obviously, manufacturers cannot be expected to go fully remote just yet. The technology isn’t ready to fully automate every plant and facility with zero human oversight. That said, any job that can become flexible should. Using Agile in conjunction with SaaS platforms will give manufacturers all the positives of many workflows – including design and project management – without forcing workers together into an environment they do not want. The leaders of tomorrow will not only attract and retain the best talent, but they will also maximize their potential by creating a working environment that speaks to the workforce’s wants and preferences.  

Minimizing Risk in a Volatile Market  

Risk doesn’t just come from disease or climate change. Manufacturers have been feeling increasing pressure as time-to-market shrinks and products are expected to be designed, developed, built, and deployed faster than ever. In this world, any mistake – such as missing a design flaw that only becomes apparent once a prototype is built – can have a huge negative impact on ROI. In traditional sequential workflows, however, product designers rarely communicate with the manufacturing team. After all, their stage is done and they’re onto the next product design.  

In Agile product development, this doesn’t happen. Agile is about bringing together all stakeholders in a product, regardless of what phase they belong to. This allows designers to have more direct communication with service technicians, frontline operators, engineers, and even clients. Communication is streamlined and the risk of error is reduced. The frequent check-ins and meetings that come with Agile product development give more time for challenges and fears to be voiced and corrected, before the damage builds into a negative cost factor.  

By emphasizing collaboration, communication, and frequent team-wide check-ins, Agile product development reduces the likelihood of a small mistake snowballing into a product disaster. In an increasingly complex competition, ripe with supply chain issues, increasing compliance laws, and that ever-constant pressure to be faster, Agile supplies the advantages while minimizing the risks.  

Keeping Up with the Competition

It may sound obvious but we wanted to end with this simple message: Just because your organization is not embracing Agile product development does not mean your competitor is doing the same. While manufacturers in general have been slower to adopt Agile, this does not mean there has been zero penetration.  

We have talked to customers who use Waterfall product development and are quite happy with it – it’s “fast enough.” What was fast enough in 2022, however, may not be fast enough in 2023 and beyond. As organizations get more familiar with Agile product development and are able to deploy it at scale, we anticipate these manufacturers will pull ahead – slowly at first, then significantly. There are simply too many advantages to Agile. Eventually, the traditional sequential style won’t be able to keep pace in the coming years, especially as digitization continues and new digital transformation platforms emerge.  

Odds are, if you’re a manufacturer reading this, you already work in a distributed company. Why not give yourself the full toolset to take full advantage of it. Agile, along with SaaS and cloud platforms, represent the next step forward. Even if your organization ends up not adopting a single Agile principle, you should still care about Agile product development and what it can do…if, for no other reason, because your competition certainly does.  



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About the Author

Colin McMahon

Colin McMahon is a senior market research analyst working with PTC’s Corporate Marketing team, helping to provide actionable insights, challenging perspectives, and thought leadership on trends, technologies, and markets. Colin has been working professionally as a research analyst for many years, and he enjoys examining and evaluating just how large the overall impact of digital transformation technologies will be. He has a passion for augmented reality and virtual reality initiatives and believes that understanding the connected ecosystem of people and technology is key to a company fully realizing its potential in the 21st century.