Product Technology Transfer in the Upstream Supply Chain

Abstract

This article addresses the transfer of new product technologies from outside the firm for integration into a new product system as part of a product development effort. Product technology transfer is a key activity in the complex process of new product development and is the fundamental link in the technology supply chain. Product technology transfer too often is dealt with in an ad‐hoc fashion. Purposeful management of the product technology transfer process leads to more effective transfers in terms of timeliness, cost, functional performance, and competence building. Better management of product technology transfer gives firms access to a greater variety of new technology options, improves a firm's ability to offer significantly differentiated products, deepens the firm's competitive competencies, and positively influences sustained product development success. The central objective of this article is to gain insight into product technology transfer so that companies can manage this process more successfully and so that researchers can investigate this critical activity further.This article describes the technology supply chain as a unique form of a supply chain that poses a set of managerial challenges and requirements distinguishing it from the more traditional component supply chain. Because a single product technology transfer project is the fundamental piece in the technology supply chain, understanding this piece well is key to leveraging the extended technology supply chain and to improving overall product development performance. This article integrates literatures on new product development, supply chain management, and technology management and builds on organizational theory to present a conceptual model of determinants of product technology transfer success. The core proposition is that product technology transfer effectiveness is greatest when companies carefully match (or “fit”) the type of technology to be transferred (the “technology uncertainty”) with the type of relationship between the technology supplier and recipient (the “interorganizational interaction”).A quite detailed framework characterizing technology uncertainty along the dimensions of technology novelty, complexity, and tacitness is presented to help in assessing the challenges associated with transferring a particular product technology. This article also considers detailed elements characterizing the interorganizational interactions between the technology source and recipient firms. This helps firms consider the appropriate means to facilitate the interfirm process of technology transfer. Overall, this article provides practical insight into characterizing technologies and into improving the product technology transfer process. This article also provides a strong theoretical foundation to aid future research on product technology transfer in the technology supply chain.