Product development gets a makeover—with virtual reality

Here at McKinsey, we’re perhaps best known for the strategic counsel we provide business leaders around the world. But we do much more than that. We join clients in the C-suite, on the frontlines, and everywhere in between to transform how they work, build enduring capabilities, and embed technology into everything they do.

One way we do that today is about to get a makeover—with virtual reality (VR). “Our product development and design-to-value (DTV) capabilities are getting a big step up thanks to VR,” explains Tobias Geisbüsch, a senior expert and industrial engineer who works in product development.

In the past, Tobias explains, the way we helped clients build new products and unlock value in existing ones has been extremely effective, but it wasn’t without certain limitations. “We have DTV labs in ten locations all over the world,” he says. “We would fly everyone to one location—in Singapore or Poland, for example—and create complex models and booklets on the ground. But there might be certain products you couldn’t get in that location, and the situation overall limited the amount of time we had for input and iterations. We knew there had to be a better way.”

So two years ago, the product-development team within our Operations Practice in Europe started to experiment with VR, the computer-generated immersive environments often used in gaming. At the time, the technology was advancing quickly. VR goggles had become more affordable, and digitization and increased processing power were making it easier to import visuals from graphic design studios, drones, and satellite photography.

“Virtual reality breaks the constraints of our physical world,” explains Mateusz Marek, an expert who is a physicist by training and leads cost-engineering work at McKinsey. “It can be used anywhere, anytime, with one person or tens of people. You can see structures you couldn’t access before, either because they are too big or in places we couldn’t get to.” According to Mateusz, these include places like airfields, mines, industrial sites, weather stations.

VR demos can be experienced in group settings with a moderator and screen or remotely, by dialing in and joining others in a virtual “room.” According to those who have tried it, the experience takes some getting used to.

“It feels strange at first,” says Jean-Victor Panzani, an associate partner who has used the technology with a number of clients. “You have to realize your body is in a different place from what you are seeing, but you quickly get used to it, and it feels like reality.”

Product development gets a makeover—with virtual reality
Experts from Poland, Taiwan and the United States collaborate in this virtual reality demo
Product development gets a makeover—with virtual reality

A virtual-reality demo can help our designers, engineers, and developers solve problems in new ways. It lets them step into a world where they can see and interact with a product, access a variety of data with a mouse click, and make assessments across a range of variables. The team calls it “immersive ideation.”

In one recent example, a team used VR to redesign an electric-vehicle charging station. Participants could create, test, and improve new features that were not even at a prototype stage yet. How did it look? Did it have the right functionalities? Was it easy for a driver to access the station?

And they could interact with the charging station virtually, in ways that would be impossible in reality: making cross-sections, tearing components apart. They could point to different components, and a list of materials, shapes, and colors would pop up. They could test variations, compare access with internal components for maintenance, and even simulate the recharging sequence of an electric vehicle.

It was an immediate ‘aha’ moment—and they agreed on the spot to make the investment. Slides alone couldn’t have done it.

Jean-Victor Panzani, McKinsey associate partner

That’s because our VR platform incorporates a portfolio of McKinsey assets and expertise developed from our work around the world. “A person can see analytical data per component—cost, variations, energy efficiencies,” explains Tobias. “Our X-ray data covers a company’s history with that particular component: How many did [the company] buy over five years, what percentage of the overall product budget is it? Social-media analytics offer consumer insights such as color and feature preferences. And it includes product-design guidance from our Design Practice.”

VR can also help developers and engineers work faster, through instantaneous iterations and seamless collaboration no matter where people happen to be located. In some cases, design development can be reduced by half. “More companies can also benefit from using the DTV methodology, which previously had challenges related to the size or availability of products,” points out Wolfgang Guenthner, a McKinsey partner and mechanical engineer.

The team has used VR to design and refine a range of products, from cereal boxes to heavy industrial equipment to hotel lobbies. Sometimes, VR can also be used to change mind-sets.

Jean-Victor recalls working on a team helping a major food-processing company with an enterprise-wide procurement transformation. They had a number of plants around the globe that were run by electrical controllers, each with a unique design that was complex to make, expensive to buy, and difficult to maintain. If they could standardize these control panels, it would be a major way forward to improving overall competitiveness.

“None of the senior steering executives had seen the actual electrical boards or knew how they worked. There was reluctance to fund a major redesign of those ‘big black boxes’,” remembers Jean-Victor. “We decided to use a VR demo at the meeting. As the different control panels appeared side by side in VR, it was an immediate ‘aha’ moment—and they agreed on the spot to make the investment. Slides alone couldn’t have done it.”

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