Supplier selection under technological uncertainty in new product development projects

Abstract

Increasingly, firms involve external companies in the innovation process to integrate new technology. However, under technological uncertainty, it may not be obvious which technology will be the most suitable to incorporate. Few studies have investigated how technological uncertainty affects firms' supplier selection for new product development (NPD). Hence, this paper aims to investigate how firms select suppliers for collaborative NPD under varied levels of technological uncertainty. This research is based on seven case studies in which 53 interviews were conducted. Two strategies for supplier selection under technological uncertainty are discussed. These are based on an evaluation of: i) the supplier's present situation; ii) previous experience. The findings show that technological capabilities were an important criterion in the assessment of suppliers in projects with both low and high technological uncertainty. Moreover, in projects with high technological uncertainty, relational capabilities were important.