Collaborative involvement in the new product process between a major OEM and its suppliers

Abstract

This paper describes the results of empirical research into a sample of Tier 2 automotive component suppliers to a Malaysian automotive OEM (Original Equipment Manufacturer). The paper investigates the competitiveness within the supplier as a consequence of working for, and with, the OEM. The ability to leverage the suppliers' involvement in the OEM's product development process is seen as a key enabler to improve the overall competitiveness of the suppliers to develop and sustain commercial interests with global customers beyond the OEM. Measurement of supplier buyer relationship indicates the intensity of the relationship. The correlation between the market and technology competiveness with supplier involvement in product development is investigated. The study has shown that supplier's involvement is significant for firm's competitive position. However, the relationship has not given the suppliers more access to new market or makes them more responsive to market needs. But, the high percentage of partnership that is growing and established indicates a positive outlook. The efforts with regards to maintaining a good relationship by both parties is necessary to ensure that the collaboration effort is a successful one. It is envisaged that these activities will contribute towards building a Malaysian industry base that can meet current and future technology and competitive needs of the industry in a global competitive situation.