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

Abstract

In many industries, firms are striving to integrate material suppliers earlier into the new product/process development process. This involvement may range from simple consultation with suppliers on design ideas to making suppliers fully responsible for the design of components or systems they will supply. In this paper, we develop and test a conceptual model of the effect of elements of the supplier integration process on cost, quality, and new product development time, under conditions of technology uncertainty. Technology uncertainty is operationalized here, as the degree to which the product or process technologies employed in the project are new, complex, and/or rapidly changing. The results suggest that technology uncertainty have a negative impact on cost results, but no direct effect on quality or cycle time. The results also show that certain elements of the supplier integration process are more likely to be employed under conditions of technology uncertainty, leading to significant improvements in cost, quality, and cycle time objectives.