Integrate suppliers into new product development

This sample chapter from Supply Chain Redesign: Transforming Supply Chains into Integrated Value Systems explains how supplier involvement in new product development can have both positive and negative impacts on technology risk and uncertainty, then explores the factors that determine whether supplier integration is the right decision for a particular organization.

This sample chapter from Supply Chain Redesign: Transforming Supply Chains into Integrated Value Systems offers managers practical guidance for working cooperatively and effectively with the best organizations in their supply chain. It asserts that organizations need to capitalize on the positive aspects of supplier involvement, recognizing:

The supplier may have greater experience or expertise with the technology and, as a result, may have better information about where the technology can be successfully applied.

Some (or all) of the technological risk may be taken on by the supplier.

The buying firm may have some ability to influence the direction of the supplier's R&D efforts in order to match developing technologies with the buying firm's technology strategy.

However, organizations also need to recognize:

Involvement with a supplier may tend to lock the buying company into the supplier's technologies.

A supplier with an "inside track" may not have as much incentive to innovate, slowing the pace of technological advancement.

Title: Supply Chain Redesign: Transforming Supply Chains into Integrated Value Systems
ISBN: 0130603120
Published: August 2002
Authors: Robert B. Handfield, Ernest L. Nichols, Jr
Chapter: Chapter 6: Customer/Supplier Integration Into New Product Development
Published by Prentice Hall