Chapter 15 Involving Suppliers In New Product
Development
Today’s business climate is all about change. Decisions made early in the development cycle have a
significant impact on quality, cycle time and cost of the product.
Procurement can add real value by adding their knowledge of the supply market, selecting the right
partner, and then managing the relationship. Moreover, a the design proceeds, engineering changes
become more difficult and expensive to make.
Thus, effective product management means involving all parties early, resolving conflict early, and
through this achieving the consensus required to move the product quickly to market. The processes
associated with ‘best practice’ in supplier involvement in new product development have often been
characterized by managers and researchers as a ‘black box’.
Working with suppliers creates many benefits for the buyer. We examing two key categories of
benefit: product related and organization related. At the product level these benefits include:
- Improved product quality;
- Increased manufacturability of product;
- Reduced cycle time;
- Reduced development costs;
- Decreased product cost.
At the organizational level, ESI provides numerous strategic benefits. These include:
1. Learning effects. The buyer can leverage the investments made by the supplier in their area
of core competence. Since the supplier is expert in their area, the buyer is able to gain
economies of scale and scope in learning, without having to make the physical and time
investments.
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Development
Today’s business climate is all about change. Decisions made early in the development cycle have a
significant impact on quality, cycle time and cost of the product.
Procurement can add real value by adding their knowledge of the supply market, selecting the right
partner, and then managing the relationship. Moreover, a the design proceeds, engineering changes
become more difficult and expensive to make.
Thus, effective product management means involving all parties early, resolving conflict early, and
through this achieving the consensus required to move the product quickly to market. The processes
associated with ‘best practice’ in supplier involvement in new product development have often been
characterized by managers and researchers as a ‘black box’.
Working with suppliers creates many benefits for the buyer. We examing two key categories of
benefit: product related and organization related. At the product level these benefits include:
- Improved product quality;
- Increased manufacturability of product;
- Reduced cycle time;
- Reduced development costs;
- Decreased product cost.
At the organizational level, ESI provides numerous strategic benefits. These include:
1. Learning effects. The buyer can leverage the investments made by the supplier in their area
of core competence. Since the supplier is expert in their area, the buyer is able to gain
economies of scale and scope in learning, without having to make the physical and time
investments.
1
