Purchasing Joins the NPD team

Abstract

OVERVIEW:As firms come under pressure to reduce costs and improve product quality, the role of purchasing is changing. Many are treating the purchasing department as a full partner with marketing, manufacturing, and engineering in interdisciplinary new product development teams. The focus of purchasing now often emphasizes integration back up the supply chain, and sourcing a product or service rather than just purchasing it. However, this “ideal” vision of purchasing integration may not always be the best supply chain model for new product development. Some firms, for example those manufacturing custom-engineered products, may find that a more traditional view is more appropriate. Thus, firms need to consider the potential strategic contribution of purchasing, and decide whether it is worthwhile to integrate purchasing more fully into their own new product development process.