Purchasing involvement in technologically uncertain new product development projects: Challenges and implications

This paper explores an emerging field of research within purchasing that concerns the changing role of purchasing when companies embark on technologically uncertain NPD projects. Where existing research has examined the role of purchasing in facilitating early supplier involvement in new product development, little research has been done to date on how purchasing's role might change when facing technologically uncertain NPD that require new capabilities and new technology. Based on an in-depth case study of a technologically uncertain NPD project in the passenger ship rescue equipment industry, the paper sheds light on how supplier involvement in NPD projects with a high degree of technological uncertainty impacts on a company's sourcing strategies and the challenges this poses for purchasing.Based on the case study findings, we propose a) that early purchasing involvement in technologically uncertain NPD projects requires a mature purchasing organization that possesses competences to interact effectively with R&D and b) that involving a new supplier from a different industry in NPD projects characterized by technological uncertainty requires a leap of faith from both innovating firm and supplier. The paper contributes to research in early supplier involvement in new product development, in particular the thin branch within this body of literature that now focuses on early purchasing involvement.     

A knowledge sharing framework for black,grey and white box supplier configurations in new product development

Managing supplier collaboration is increasingly cited as a key success factor in new product development (NPD) performance. Knowledge sharing between customer and supplier is a critical issue to manage collaboration but one which has only been partially investigated in the inter-organisational NPD context. This means that the specific characteristics of knowledge sharing according to the three classical supplier involvement configurations (black box: design is supplier driver, grey box: joint design and white box: design is customer driven) are still largely unknown. This research proposes to fill this gap by presenting a conceptual framework for knowledge sharing according to the supplier involvement configuration. Knowledge sharing integrates knowledge transfer, translation and transformation. A qualitative methodology based on cross-case comparisons of six projects in two companies is used. This research shows that the dynamics of knowledge sharing depend on each configuration. Thus, for black box projects, knowledge translation is a prerequisite for knowledge transfer. For grey box projects, knowledge transfer and translation are initiated simultaneously in a continuous loop. For white box projects, knowledge transfer is the key activity and potentially generates knowledge translation. The results suggest that managers should pay attention to translation activities which are critical for the success of co-development projects.     

Exploring early purchasing involvement in discontinuous innovation: A dynamic capability perspective

This paper aims to address the gap concerning our knowledge about early purchasing's involvement (EPI) in new product development (NPD) projects in contexts characterized by discontinuous innovation. We adopt a dynamic capability perspective to explore how existing sourcing and supplier relationship management capabilities are adapted when purchasing agents become involved in discontinuous innovations projects. We use an embedded case-study approach to study four NPD projects in a heating, ventilation, and air conditioning (HVAC) company. The case studies are based on interviews with managers and staff from the research and development, purchasing, and marketing departments, as well as suppliers involved in the projects. Our empirical findings capture emerging purchasing practices including a “reversed” sourcing process, purchasing-marketing interaction, and the coordination of “a learning atmosphere” between the R&D department and suppliers through proactive innovation meetings and creativity workshops. We derive propositions to conduct further research into the role of the purchasing department in times of discontinuous innovation. We also provide a framework of sourcing and supplier-relationship practices that firms can use when embarking on discontinuous innovation.     

Integrating design metrics within the early supplier selection process

It has been found from the contemporary research in the fields of supply chain management and concurrent engineering that significant benefits can be achieved if suppliers are involved in product development. However, recent investigations in manufacturing industries have revealed that early supplier involvement in the design process is not widely practiced. One issue is the lack of an appropriate customer–supplier interface to assess the suitability of suppliers with reference to design criteria. This paper proposes a mechanism for evaluating supplier involvement during product development. The assessment tool includes four types of distinctive indices to measure supplier involvement in the design process, namely: Satisfaction Index, Flexibility Index, Risk Index, and Confidence Index. These indices measure the extent to which both the customer requirements and the supplier capabilities match or mismatch and therefore reflect the potential or risk of signing a project contract. The proposed methodology is discussed within a multinational telecommunications company and preliminary analysis indicates that the approach provides an effective mechanism for selecting suppliers involved in the product development process.     

Together we share? Competitive and collaborative supplier interests in product development

While supplier involvement in product development projects can contribute with valuable knowledge and expertise, such involvement also poses organizational and managerial challenges, particularly if several rival suppliers are involved. This paper explores these challenges in the wind turbine industry, based on two interrelated Danish case studies. The analysis results in three propositions regarding how supplier rivalry and technological specialization influences roles, coordination patterns and communication between actors in distributed product development projects.     

Threats to new product manufacturability and the effects of development team integration processes

The thesis of this article is that new product manufacturability (NPM) is influenced by certain challenges inherent in new product development (NPD), and by efforts to integrate manufacturing and other functional concerns into the product design process. This research tests the direct and interacting effects of these influences via a survey of 91 completed NPD projects representing a variety of manufacturing industries. While most hypotheses were supported, the analysis also provides some surprising findings. Project complexity and increased levels of design outsourcing are associated with poorer NPM. Product newness and project acceleration are associated with better NPM. All the measured aspects of development team integration are associated with better NPM, including intense manufacturing involvement, a collaborative work environment, supplier influence on the product design, and strong management support in the project. Furthermore, certain integration variables exert moderating effects on relationships between technological uncertainty, product newness, design outsourcing, project acceleration and NPM. By exposing these relationships this research extends the theory of product development influences on manufacturability beyond a focus on engineering-oriented approaches (e.g., design-for-manufacture). The results suggest that larger managerial issues must be addressed and that more contingency-oriented research is needed to explore the benefits and limitations of development team integration processes.     

Performance improvement in new product development with effective tools and techniques adoption for high-tech industries

Utilization of appropriate tools and techniques in the process of new product development (NPD) can assist firms to achieve better performances in launching new products. However, in practice, many useful tools and techniques are not utilized effectively. This study undertakes an in-depth empirical investigation of the appropriate tools or techniques that can be used at each stage of the NPD process. The study also analyzes the impact of individual tools or techniques both on overall NPD performance and on individual performance indicators within the process. The study finds that several NPD tools and techniques (for example, DOE, FMEA/DFMEA, and supplier involvement) have a significant effect on the overall performance of NPD and on a number of performance indicators, but that their utilization is not especially high. In addition, the study finds that DFX, conjoint analysis, and concept test, which also have a significant effect on NPD performance, are relatively neglected by the firms. The study provides valuable guidance to firms in using such tools and techniques more appropriately and effectively.     

Supplier's involvement and success of radical new product development in new ventures

Supplier involvement is essential to a new venture seeking to develop a radical innovation. Despite this, prior literature has not adequately addressed supplier involvement in radical innovation, nor what the antecedents to increased supplier involvement are. We build and test a conceptual model of the antecedents and new product performance outcomes of supplier involvement in the development of radical innovation by new ventures. Antecedent variables (supplier's specific investments and the new venture's qualification of the supplier's abilities) are drawn from the transaction cost analysis literature. We include new venture's relative power and new venture's level of commitment to the supplier as contingency conditions. We develop a set of hypotheses relating supplier involvement to radical innovation performance, relating the antecedent variables to supplier involvement, and also testing the interaction effects of the two contingency conditions. We gather data from both new ventures and their major suppliers for 173 recent radical innovation projects, and use hierarchical regression analysis to test our hypotheses. We find that the contingency conditions moderate achieved levels of supplier involvement, and also find a direct relationship between achieved level of involvement and performance. We conclude with theoretical contributions and managerial implications.     

Bring your suppliers into your projects—Managing the design of work packages in product development

Early supplier involvement and integration is important in product development on strategic as well as on operational, project and team levels. Saab Aerospace intended to achieve early supplier involvement and high level of integration on all levels in the redesign of the aircraft JAS 39 Gripen. The research underlying this article shows that the intended strategy was only achieved on the strategic level and not on the operational project and team levels. One major reason for this was that the design of the work breakdown structure (WBS) and work packages (WP) in the product development followed the functional and departmental logic within each company resulting in incompatible structures and preventing communication and information exchange. This article intends to explore how prevailing functionally designed WBS and WP structures created barriers and to demonstrate how supplier integration can be improved by designing collaborative WBS and integrated WP. The Dependence Structure Matrix (DSM) is introduced in order to analyze, visualize and manage interdependencies and information exchange between Saab Aerospace and its supplier on different levels of the WBS and in different phases of the development process, following the logic of interdependencies and information flow, in order to support a strategy focusing on integration of suppliers on the project and team level.     

What is required for greener supplier selection? A literature review and conceptual model development

This paper examines the existing literature on green supplier selection. In total, 60 articles are reviewed, all published in peer-reviewed journals between 1991 and 2011. The articles are analyzed in terms of several general variables such as type of research and theoretical viewpoint, as well as more specific variables such as the supply chain position considered, stages of the supplier selection process studied, and the perspective taken on environmental criteria. The main findings are threefold. First, analytical research, focusing on developing normative decision models for the final stage in green supplier selection is clearly most dominant, employing a wide range of techniques. Second, empirical research is less prominent and generally lacks a clear theoretical background. Third, very little conceptual research has been done linking green supplier selection to an organization's strategy. Research on green supplier selection is highly fragmented and in danger of overemphasizing the technical aspects of supplier selection. Based on this review of the articles, a conceptual model of green supplier selection is presented, aimed at integrating the different dimensions of green supplier selection and identifying directions for future research.     

A contingent theory of supplier management initiatives: Effects of competitive intensity and product life cycle

Direct investments in supplier development and close relationship building are the two major collaborative supplier management strategies for developing and accessing superior supplier capability. The impact of these two strategies, however, has not been uniform across firms, calling for a deeper examination of their relative effectiveness. Utilizing multiple theoretical frameworks, this study examines the relevance and effectiveness of the two collaborative strategies across the growth and maturity stages of the product life cycle (PLC). Specifically, the study analyzes the influence of competitive intensity as an antecedent to supplier development and relational initiatives, and the role of product life cycle as a moderator of the inter-relationships among competitive intensity, supplier development, relational initiatives, and supplier capability. Based on primary survey data, and discussion with practicing managers, the study finds that the individual and integrative effectiveness of supplier development investments (SDI) and relational orientation (RO) can be influenced differently by competitive intensity and PLC stage. In particular, RO can have a foundational role in motivating SDI for superior supplier capability, as also in safeguarding against supplier opportunism in the standardized product market context of the maturity stage. The managerial and theoretical implications of varied emphasis on the two collaborative supplier management strategies across the PLC stages are discussed.     

Impact of relational norms, supplier development and trust on supplier performance

Supplier relationship management and supplier development initiatives assume a fundamental role in enterprise supply chain management. An important aspect of effective supplier relationship management is the role of trust. This paper seeks to understand whether supplier relationship management or supplier development initiative should be emphasized as a firm strives to achieve superior supplier performance. The analysis and discussion draws upon sourcing strategy literature and is based on empirical survey-data of mid to upper level managers with responsibility for supply management initiatives in their respective organizations in Denmark and in the USA. It examines the interrelationships among “relational norms”, “trust”, “supplier development initiatives” and ensuing “supplier performance”. The data analysis shows that firms must emphasize relation and trust building activities before investing in supplier development initiative. Supplier perception audits must be routinely performed to gauge the level of trust and strength of relational norms.     

Mobilising supplier resources by being an attractive customer: Relevance,status and future research directions

For buying companies, supplier resource mobilisation is an essential process in gaining and sustaining preferential access to supplier resources. This editorial provides insights into the processes of supplier resource mobilisation and introduces three empirical studies on supplier resource mobilisation. We first introduce the supplier resource mobilisation cycle. This cycle may serve as a roadmap for purchasing and supply management (PSM) practitioners seeking to improve access to supplier resources. In addition, this article informs PSM scholars about the status of the supplier resource mobilisation literature and proposes avenues for future research. The cycle includes six stages: (1) becoming an attractive customer, (2) segmenting suppliers, (3) generating supplier satisfaction, (4) becoming a preferred customer, (5) engaging in supplier-oriented actions, and (6) integrating supplier resources. Finally, we introduce the articles in this issue that each examine a different stage of the supplier resource mobilisation process.     

On the relationship between supplier integration and time-to-market

Recent operations management and innovation management research emphasizes the importance of supplier integration. However, the empirical results as to the relationship between supplier integration and time-to-market are ambivalent. To understand this important relationship, we incorporate two major recent developments. First, the literature has started to redefine supplier integration into two dimensions, supplier product integration and supplier process integration. Second, recent research has begun to examine spillover effects that extend beyond the direct costs and benefits of the supplier contract. Using survey data of 116 firms in the industrials, health care, and information technology industries, the results confirm our hypotheses and show that supplier product integration decelerates time-to-market while supplier process integration accelerates time-to-market. The results also show a positive relationship between supplier integration and the adoption of external technologies, which either decelerates or accelerates time-to-market depending on the level of internal exploration activities. Our research, thus, helps to open the ‘black-box’ of the relationship between supplier integration and time-to-market, and provides a theoretically grounded explanation to the apparent contradictory results in prior research about the influence of supplier integration on time-to-market. In addition, we contribute to research on spillover effects by emphasizing that information technology adoption and assimilation is an important spillover effect of supplier integration.     

Validating a model for assessing the association among green innovation,project success and firm benefit

Conceptualizing green innovation in the new product development (NPD) context is still rudimentary. The primary objective of this study is to empirically investigate the association among green innovation, NPD success, and firm benefit. This study empirically investigated a sample of NPD projects in the Taiwanese high-tech industry. The structural equation modeling approach was used to validate the research model. In testing the moderation effect, a multiple-group analysis was used. The findings indicate that green innovation contributes significantly to NPD success and firm benefit. Specifically, green innovation has a positive effect on NPD success and then on firm benefit. The results also show that industry sector has a moderating effect on the relationship between green innovation and NPD success.     

Identifying the moderating influences of external environments on new product development process

Few studies have attempted to investigate the following: (1) whether the firm's core capabilities or resources and routines (e.g., integration among functions) for product development, in the presence of environmental dynamics, become incumbent inertia or core rigidities? and (2) how environmental dynamics affect the influence of a project team's implementation capabilities in the new product development (NPD) process on new product launch performance? This study approaches these questions by addressing the three most indispensable NPD process components (i.e., marketing, technology, and organization) and incorporating new moderators, namely pace of technological change and competitive intensity, within a single study. It specifically examines the extent to which the latter two external environmental variables moderate the impact of NPD practices on new product launch outcome. Data obtained from a survey of NPD projects developed and launched by Korean manufacturers suggest that environmental dynamics would reduce the contribution of functional-specific sources of advantage (resources) and project-specific sources of advantage (e.g., integration among functions) to organizational implementation capabilities (i.e., a project team's proficiency in executing NPD activities). Moreover, the research also shows that market dynamics may increase the contribution of organizational implementation capabilities to NPD project performance.     

In union lies strength: Collaborative competence in new product development and its performance effects

It is widely recognized that new product development (NPD) is a highly interdependent process, yet efforts to empirically model the interdependence and examine its effect on firm performance are scarce. Our study addresses this research gap. We model firms’ abilities to collectively collaborate with suppliers, customers, and internal employee teams in NPD as collaborative competence and examine its impact on project and market performance. Using responses collected from 189 NPD managers, we find empirical evidence for collaborative competence and its differential impact on project and market performance. Specifically, we find that collaborative competence has a direct impact on project performance, but its impact on market performance is indirect, mediated through project performance. The results have significant managerial implications; achieving superior market performance from inter- and intra-organizational involvement is contingent on achieving superior project performance, and companies that fail to achieve desired project performance outcomes will also fail in achieving market performance goals.     

Adopting key lessons from agile manufacturing to agile software product development—A comparative study

Many industrial new product development (NPD) software projects apply nowadays agile methodologies. These methodologies, such as Scrum, eXtreme Programming (XP), and Feature-Driven Development (FDD) date back to 1990s, and the Agile Manifesto was declared in 2001. However, already before that the concept of agile manufacturing (AM) was discovered to describe a corporate ability for quick adaptation to changing requirements. There is surprising amount in common between these two fields. This raises a question of whether NPD software development companies could take even more overall advantage of those different agile approaches. This interdisciplinary paper explores the commonalities between the key concepts of AM and some of the most popular agile software methods, and consequently suggests potential new areas for software process improvement (SPI) in large-scale NPD organizations. An industrial case example illustrates how agility in embedded software product development can be enhanced by following typical NPD principles. We conclude that there is potential for further improvements in software product development industry in general by seeing agility as a wider, organization-oriented business concept following the AM/NPD learning. Current agile software process models cover only a subset of this space.     

Do dependent suppliers benefit from buying firms’ sustainability practices?

In view of the limited understanding and research on the effect of sustainable supplier development practices on supplier performance, this study examines the impact that the implementation of assessment and collaboration practices have on supplier performance outcomes. In addition, we investigate the role that supplier dependence has on the performance outcomes of assessment on and collaboration with suppliers. Based on a sample of 129 Chinese manufacturing firms, we run a series of OLS regressions to test our theoretical models. The findings suggest that collaboration improves supplier performance, while assessment causes a deterioration. In addition, supplier dependence could be leveraged for suppliers to gain performance improvements through collaborative practices.     

Measuring performance in new product development projects: A case study in the aerospace industry

Implementing a performance measurement system (PMS) for research and development (R&D) is fundamental for supporting decision making and motivating researchers and engineers; however, this is a very challenging task, because effort levels are not measurable and success highly uncertain. Even if the subject has largely been debated in academic and practitioners literature so far, an acknowledged managerial approach is not available yet. This paper investigates the implementation and use of a PMS in new product development (NPD) projects, which represents a relatively unexplored issue in the R&D performance measurement debate. In particular, studying the case of a military aircraft development project, it provides a reference framework that integrates the major literature contributions' findings and suggests a practical approach for the design and implementation of an effective PMS for NPD.