Supply network delegation and intervention strategies during supplier involvement in new product development

Abstract

PurposeThis paper proposes and empirically investigates two strategies that companies can employ to involve indirect suppliers in new product development (NPD): supply network delegation; and supply network intervention. The implications of the two strategies are explored.Design/methodology/approachThe paper brings together the traditional NPD literature, organizational behaviour and organizational economics literature, and reports on three in‐depth case studies of NPD projects, involving 39 semi‐structured interviews across three supply networks.FindingsThe findings reveal different manifestations of the two strategies of supply network intervention and delegation, when applied as part of supplier involvement in product development, and positive and negative indications of delegation and intervention, depending on the actor perspective: manufacturers perceive a need to control the product development process across several supply network tiers through intervention in supplier selection and communication, but these actions are likely to “tie the hands of the suppliers”.Practical implicationsManagers are advised to explicitly delegate decisions to suppliers, for example, by issuing parts approval lists and encouraging communication and problem solving amongst suppliers, and to exercise caution in applying the intervention strategy.Originality/valueThe paper contributes to a better understanding of how to involve indirect (sub‐) suppliers in product development, and the implications of these actions for multiple supply network actors.