Effective product development requires firms to unify internal and external participants. As companies attempt to create this integrated environment, two important questions emerge. Does a high level of internal integration lead to a higher level of external integration? In the context of product development, this study considers whether internal integration in the form of concurrent engineering practices affects the level of external integration as manifested by customer integration, supplier product integration, and supplier process integration. External integration, in turn, may influence competitive capabilities, namely product innovation performance and quality performance. Second, using contingency theory, do certain contextual variables moderate the linkages between integration strategy (external and internal) and performance? Specifically, this study considers whether uncertainty, equivocality, and platform development strategy change the relationships among internal integration, external integration, and competitive capabilities. Data collected from 244 manufacturing firms across several industries were used to test these research questions. The results indicate that both internal and external integration positively influence product innovation and quality and ultimately, profitability. With respect to contingency effects, the results indicate that equivocality moderates the relationships between integration and performance.

https://onlinelibrary.wiley.com/doi/pdf/10.1111/j.1540-5915.2005.00067.x

Internal and External Integration for Product Development: The Contingency Effects of Uncertainty, Equivocality, and Platform Strategy

https://isiarticles.com/bundles/Article/pre/pdf/21150.pdf

Effects of supplier trust on performance of cooperative supplier relationships

Organizations have been quick to realize that involving suppliers in new product/process/service development efforts has the potential for significant results. Numerous studies have highlighted the fact that supplier participation in product development projects can help reduce cost, reduce concept to customer development time, improve quality, and provide innovative technologies that can help capture market share. However, not all efforts are successful. Supplier integration is most successful when driven by a formalized process that considers supplier capabilities, level of complexity of the technology, and degree of risk. Leading companies conduct a formal in-depth supplier evaluation and risk assessment prior to supplier involvement on the project team.

Involving Suppliers in New Product Development

https://isiarticles.com/bundles/Article/pre/pdf/21316.pdf

Benefits associated with supplier integration into new product development under conditions of technology uncertainty

Purchasing organizations are exposed to risk in their interactions with suppliers, whether it is recognized and managed, addressed in a cursory manner, or altogether ignored. In order to understand the supply risk that exists, purchasing organizations can proactively assess the probability and impact of supply risk in advance, or reactively discover risk after a detrimental event occurs. The purpose of this study is to explore, analyze, and derive common themes on supply risk assessment techniques. Findings from this research indicate that purchasing organizations can assess supply risk with techniques that focus on addressing supplier quality issues, improving supplier processes, and reducing the likelihood of supply disruptions. From an agency theory perspective, these risk assessment techniques facilitate the obtaining of information by purchasing organizations to verify supplier behaviors, promoting goal congruence between buying and selling firms, and reducing outcome uncertainty associated with inbound supply.

An analysis of supply risk assessment techniques

Many managers are trying to leverage the skills and resources of key component suppliers to develop high-quality new products faster and at a lower cost. In this exploratory study, we surveyed product-development engineers in 79 small- to medium-sized firms to determine if three techniques commonly used to integrate suppliers into product development increase the supplier's perceived contributions to product development in the eyes of its customer. The techniques studied are: (1) timing of a supplier's involvement; (2) supplier's design responsibility; and (3) communication frequency. Of these, only early supplier involvement was significantly related to the perception of an increased contribution by the supplier. In addition, we found that the supplier's contributions to product development had little practical influence on the overall project technical success. The findings suggest that more research is needed to understand how to use suppliers effectively to improve product-development outcomes.

E.R. Kamath

Papers

Suppliers' contributions to product development: an exploratory study