TIMING AND EXTENT OF SUPPLIER INTEGRATION IN NEW PRODUCT DEVELOPMENT: A CONTINGENCY APPROACH

Abstract

While research on internal integration in new product development (NPD) has progressed to the examination of contingency factors that assess adequate levels of integration, contingency models examining the appropriate timing and level of integration with suppliers in NPD have yet to be empirically tested. The purpose of this study is to explore how contingency factors affect the timing and level of supplier integration into NPD, and how varying levels of integration affect project performance. The study uses structural equation modeling to analyze data on 116 NPD projects employing supplier integration sampled from international organizations representing a wide variety of industries. Results suggest that newer products signify the need for earlier supplier integration, while positive prior experience with the supplier and the procurement of highly strategic items indicate the need for tighter integration. When employed, these patterns of activity result in high levels of perceived NPD performance.