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Supplier Integration Into New Product Development

Although there is increasing evidence that involving suppliers in the new product development cycle is important, there also is evidence that not all such efforts are successful. Moreover, successful supplier integration is dependent on a large number of variables. Supplier integration considerations include tier structure, degree of responsibility for design, specific responsibilities in the requirement setting process, timing of supplier involvement in the process, inter-company communication, intellectual property agreements, supplier membership on the project team, and alignment of organizational objectives with regard to outcomes. While the benefits of supplier integration appear to be obvious, the results of a recent study show that successful supplier integration projects have special common characteristics.3 Specifically, successful supplier integration initiatives result in a major change to the new product development process. Furthermore, to be successful the new process must be formally adopted by multiple functions within the organization. The most important activities in the new development process are understanding the focal suppliers' capabilities and design expertise, conducting a technology risk assessment, and weighing the risks against the probability of success. Key questions that must be addressed are presented in the following sections and include:

  1. Which suppliers should be involved?

  2. Is the supplier able to meet our requirements?

  3. Is the supplier's technology roadmap aligned with our technology roadmap?

  4. Given the level of technical complexity, to what extent should the supplier be involved in the project?

  5. When should the supplier become involved in the project?

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