Next generation hardware development: Requirements and configuration options for the organization of procurement activities in the context of Agile new Product Development

Abstract

Companies are adapting their traditional development processes, aiming for project-specific designs that are referred to as “Agile Product Development” - flexible, adaptive and accelerated processes. Implementing these principles supports developers to react to challenges such as shortened innovation cycles. For successful implementation and use of these new principles, support functions such as procurement have to be adapted to the demands of flexible, agile and accelerated processes. Complexity of tasks and impact on corporate success of procurement increased significantly in the last decades resulting in specialized stand-alone procurement departments. Being optimized for traditional development methods such as stage-gate, these departments will be challenged by agile developers demanding for highly flexible, hardly predictable procurement activities. Therefore, the authors present a scientifically derived catalog of requirements for procurement in agile product and technology development projects, e.g. shortened lead times and vague technical specification of products to be procured. Based on this catalog, options for the configuration of procurement in agile development projects, such as the organizational merging of development and procurement, are discussed. Adapting the procurement according to the requirements derived in this paper will help companies to successfully conduct procurement activities in regard to the needs of agile new product development.