The role of suppliers in contract product development - A categorization of supplier roles including success factors and information sharing guidelines for supplier involvement in contract product development
Master thesis
Åpne
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http://hdl.handle.net/11250/2607699Utgivelsesdato
2019Metadata
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Sammendrag
Summary
Purpose
Supplier involvement in new product development requires information sharing between the buyer and supplier. Prior research however usually discusses large companies, with continuous production. Far less research is done for contract development. The objective of this thesis is therefore to investigate the role of the supplier in contract development. As information sharing is an important factor with regard to the success of the supplier performance, this thesis investigates what tools and best-practice exists in the literature. Furthermore, a possible categorization of the different roles of a supplier in a development project is identified. The thesis also discusses if any of the best-practice methods are considered relevant in buyer-supplier cooperation in contract development. Lastly the thesis suggests formal guidelines for buyer-supplier information sharing for contract development.
Structure
The structure of the thesis started by addressing the theory and relevant literature in the fields of contract development, supplier involvement, information sharing and success factors. The theory section is rounded out by discussing a few of the key tools and best-practices in the field of supplier involvement. The empirics section of the thesis starts with a presentation of the survey and the workshop that were conducted. The results of the survey are presented. Following the empirics is the discussion and conclusion. The thesis is concluded with the bibliography.
Theoretical framework
The theory section discussed and defined the key concepts used. It also summarized research done in the field. This thesis discussed contract development and the aspects in which contract development differs from off-line development process
(Alderman, Thwaites og Maffin 2001). The concepts of capacity projects and know-how projects are defined as the two types of projects that can be undertaken by a supplier (Wagner og Hoegl 2006). Furthermore, a model for supplier involvement is shown. Supplier involvement consists of two dimensions, the degree of development risk in the project and the degree of responsibility held by the supplier (Wynstra, Wynstra og Pierick 2000). Theory on information sharing is presented, showing that previous research found a link between information sharing and the relationship quality. A link between relationship quality and supplier performance on a development team is also found (Sjoerdsma og van Weele 2015). Success factors for supplier involvement is found to have both long-term and short-term benefits (Echtelt, et al. 2006). Success factors are also found to correlate to decreasing development cost, improving product quality and shorter time to market (Johnsen 2009). Further, success factors can be divided into two groups; relationship structuring factors and asset allocation factors. The relationship structuring factors facilitate the assets allocation factors, while the asset allocation factors correlate with the successful implementation of suppliers in the new product development processes (Ragatz, Handfield og Scannell 1997).
The tools and best-practices section discussed the Advanced Product Quality Planning (APQP) method. APQP is a process for facilitating communication between all persons and activities in a development team (Stamatis 2018). The APQP process has adopted Failure Mode and Effect Analysis (FMEA), control plans, and checklists among others in order to facilitate communication.
Findings
The survey questioned both companies that currently involve suppliers and companies that did not involve suppliers in development projects. All survey respondents are involved in contract development. The research found that communication is an important factor when choosing to involve a supplier in development. Firms that have not involved suppliers, indicated that communication would be critical if they did decide to involve suppliers in the future. Firms not currently involving suppliers indicated that limitations on their own internal capacity would also be critical if they were to involve suppliers. Firms currently involving suppliers consider the experience of the supplier as well as cost, important when choosing which supplier to use. Based on these survey results and the findings in previous research, this thesis proposes a model for categorizing the role of the supplier in the development team. Firstly, a split of the type of project between capacity and know-how. Secondly, a split between the degree of development risk
(low and high) which correspond to arm’s-length involvement and strategic involvement. The four roles of the suppliers are:
• “Purchased design capacity” (a capacity project with low degree of development risk)
• “Module design specialist” (know-how project and low degree of development risk)
• “Design team partner” (capacity project with high degree of development risk)
• “Systems architect” (know-how project and high degree of development risk)
Success factors for each of the roles are proposed. The factors are chosen so arm’s-length development (“purchased design capacity” and “Module design specialist”) have less long-term focus. The success factors also are identified so that the relationship structuring factors are more prevalent in the strategic involvement roles (“Design team member” and “Systems architect”). For all four roles the success factors; “specify functions and performance”,” coordinating development activities with suppliers” and “formulate communication and information sharing guidelines” are included. The last one is of special interest as establishing and formulating information sharing guideline directly is connected to the relationship quality between buyer and supplier. Thereby allowing the successful involvement of a supplier on a development team. The thesis proposes an information sharing guidelines for each of the supplier roles found. The input for these guidelines are based on the survey data. The survey data found that checklist methods and FMEA are considered relevant tools for conveying technical information.
A workshop, consisting of the author and 4 experts in the field of supplier involvement and product development discussed the findings of the survey. The proposed roles of suppliers in development teams and the success factors were also discussed. The workshop group provided feedback on all work done and proposed some additional input. The workshop group considered physical information sharing to be an important tool in development projects. Physical information consists of prototypes, design sketches and mock-ups. The workshop group also suggested a partnership assessment prior to involving any supplier. The goal of a partnership assessment is for both the supplier and buyer to asses if they consider each other compatible as far as project execution, capacity and technological aptitude. The final information sharing guidelines provide a suggested plan for information sharing across the six stages of development, for each of the roles a supplier can have in a development project. The role of the suppliers requires different guidelines for information sharing. The differences reflect the uniqueness of each role and ultimately increase the quality of the relationship and by extension the performance of the supplier in contract development team. buyer and supplier. Thereby allowing the successful involvement of a supplier on a development team. The thesis proposes an information sharing guidelines for each of the supplier roles found. The input for these guidelines are based on the survey data. The survey data found that checklist methods and FMEA are considered relevant tools for conveying technical information.
A workshop, consisting of the author and 4 experts in the field of supplier involvement and product development discussed the findings of the survey. The proposed roles of suppliers in development teams and the success factors were also discussed. The workshop group provided feedback on all work done and proposed some additional input. The workshop group considered physical information sharing to be an important tool in development projects. Physical information consists of prototypes, design sketches and mock-ups. The workshop group also suggested a partnership assessment prior to involving any supplier. The goal of a partnership assessment is for both the supplier and buyer to asses if they consider each other compatible as far as project execution, capacity and technological aptitude. The final information sharing guidelines provide a suggested plan for information sharing across the six stages of development, for each of the roles a supplier can have in a development project. The role of the suppliers requires different guidelines for information sharing. The differences reflect the uniqueness of each role and ultimately increase the quality of the relationship and by extension the performance of the supplier in contract development team.
Research Limitations
The survey data only provides results from companies that do contract development, the framework of this thesis is not known to be valid for off-line development when supplier involvement in development is done. Furthermore, the respondents to the survey are all companies based in Norway, therefore geographical preferences may occur if applied to other countries.
Contribution
This thesis provides a new approach to considering the role of a supplier in a development team. The degree of development risk and type of project will identify the role of the supplier. The project also applies supplier involvement in product development theory to contract development. The thesis proposes information sharing guidelines based on the role of the supplier in the development. This provides an approach for information sharing that will increase performance quality of supplier involvement in contract development.
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