customer supplier integration

New Product Development-seminar6

سپیده محمدرائی

پدرام جهانگیری

علیرضا ناظم زاده

محسن قادری

Customer/Supplier Integration Into

New Product Development

Spring 20111 New Product Development-seminar6


Customer Need Assessment

Spring 20114

The activities concerned with the recognition,

gathering and clarification of customer needs and

their importance to determine need specifications

and objectives for new products. Sometimes the

concept is extended to cover also the activities

ensuring that all the important needs are fulfilled


Customer Need Assessment(con’t)

Spring 20115

A Customer Needs Assessment can provide marketers with insight regarding:

Where challenges or needs exist

Current problems and whether they are expected to increase, decrease, or stay the same in the future

The direct and indirect costs of failures

Which processes or products currently used are the most successful and why

Obtain reactions to a new product or solution

Anticipate future challenges or needs


Customer Need Assessment Matrix

Spring 20116

Desired

Outcome

s

Definitio

n

Ration

ale

Performance

Expectation

Importan

ce

Satisfaction

A word or

phrase in

the

customer

s terms

that

states the

need,

issue or

problem

to be

solved

Descripti

on of the

customer

s desired

outcome.

Provide

the

reason

that the

attribut

e is

importa

nt to

the

custom

er.

List the

customer

requirements in

qualitative,

quantitative, or

comparative

terms..

A

numerical

rating or

ranking

designati

on the

importanc

e of the

outcome

to the

customer

A

numerical

rating of

how

satisfied

the

customer is

with the

outcome

when using

products

on the

market


Development Needs:

Spring 20117

Better ability to recognize customers’ future

needs,

Improvement of direct contacts and cooperation

between the product development and customers

More organized and careful co-operation with the

most advanced lead-customers.

New Product Development-seminar6 Spring 20118

The most important activities in the new

development process

Understanding the focal suppliers’ capabilities

and design expertise,

Conducting a technology risk assessment,

Weighing the risks against the probability of

success

Supplier IntegrationInto New Product Development


Supplier IntegrationInto New Product Development(con’t)

Spring 20119

Key questions that must be addressed…

1. Which suppliers should be involved?

2. Is the supplier able to meet our

requirements?

3. Is the supplier’s technology roadmap

aligned with our technology roadmap?

4. Given the level of technical complexity, to

what extent should the supplier be involved in

the project?

5. When should the supplier become involved

in the project?


Supplier Integration Approaches

Spring 201110


Design Flexibility andCost of Design Changes

Spring 201111


Different Degree of Supplier Integration

Spring 201112

No Supplier Involvement

White box

Gray Box

Black Box


Process Model for Reaching Consensus on Suppliers to Integrate into NPD Project

Spring 201113


Identifying Desired Supplier Capabilitiesand Potential Suppliers

Spring 201114


Identifying Desired Supplier Capabilitiesand Potential Suppliers(con’t)

Spring 201115

New product/commodity teams should seek

to formally Specify roles and

responsibilities it requires of suppliers

selected for new product development, in as

much detail as possible.

These objectives become the primary criteria

used in supplier selection, negotiation,

alignment, and relationship management.


Supplier Risk Assessment

Spring 201116

Important factors in considering new or existing suppliers for integration:

Targets: Is the supplier capable of achieving the required targets regarding cost, quality, and product performance/function (e.g., weight, size, speed, etc.)?

Timing: Will the supplier be able to meet the product development schedule?

Ramp-up: Will the supplier be able to increase capacity and production fast enough to meet volume production requirements?

Innovation and Technology: Does the supplier have the required engineering expertise and physical facilities to develop an adequate design, manufacture it, and solve problems when they occur?

Training: Do the supplier’s key personnel have the required training to initiate and successfully operate required processes?


Supplier Risk Assessment(con’t)

Spring 201117

Develop a comprehensive risk assessment that

answers these questions:

What is the likelihood that this supplier can bring

the product to market?

How does this risk compare to other potential

suppliers?

At what point are we willing to reverse this

decision if we proceed, and what are the

criteria/measures for doing so?

What is the contingency plan in the event the

supplier fails to perform?



Spring 201118

Supplier is able to design and

manufacture a prototype or start-up

small volume production

suppliers must also be able to meet

product introduction deadlines and

ramp-up their production volumes very

quickly



Spring 201119

When the supplier’s capabilities are not at desired

levels, the new product/commodity team has two

options:



Spring 201120

If the technology is not critical to the product’s

functioning, a different supplier may be

investigated.

If limited numbers of suppliers are available and

the technology is critical to the product, the

company may undertake a more detailed

technical assessment of the supplier in order to

develop and improve the suppliers’ capabilities

early in the product development process.



Spring 201121

To carry out a detailed assessment of the

supplier’s technical capabilities, both formal and

informal approaches are required:

Informal approach

A standard survey augmented by informal

evaluations based on face-to-face discussions with

the supplier’s technical personnel

Formal approach

The company audits the supplier’s facilities for

enviromental compliance, quality, technical

capability, and cost.


Assessing the Supplier’s Technology Roadmap

Spring 201122

This second assessment ensures the short-term

and long-term alignment of the objectives and the

technology plans of the buying company and the

supplier.


Assessing the Supplier’s Technology Roadmap (con’t)

Spring 201123

To obtain maximum strategic benefit from the

integration

of the supplier, companies must share objectives

and have complementary future technology plans

convergence of the partners’ technology roadmaps

describe the performance, cost, and technology

characteristics of future products each company

plans to develop and introduce over some

specified time horizon



Spring 201124

To achieve alignment of technology roadmaps

with suppliers

Sharing information is a critical element of the

process.

Providing incentive or motivation for suppliers is

the second important element.

Organizations will need to first build stronger

relationships with suppliers.

Sharing future product plans.

In turn, suppliers may need to alter their

technological plans to align with those of major

customers.



Spring 201125

maintain a competitive edge

separate groups responsible for advanced

technology development and expertise…

continuously monitor competitors’ products,

processes, and supply bases,

suggest modifications to current sourcing strategies.


Assessing the Rateof Technological Change

Spring 201126

The rate of change in product technology

The current rate of technological change is

challenging many companies’ capabilities, and

they are seeking the help of suppliers with the

development and application of critical but non-

core technologies in their new products


Assessing the Rateof Technological Change (con’t)

Spring 201127

If a particular technology ischanging rapidly, theninvolving the supplier earlyhas potential pitfalls: thebuying company maybecome “locked into” aparticular design ortechnology, release theproduct, and discover thatthe technology has becomeobsolete or has beenreplaced by a technologywith improved performancecharacteristics


Timing of Supplier Integration

Spring 201128

Companies should consider two major factors

when deciding when to integrate the supplier into

the product development process:

the rate of change of the technology,

the level of supplier expertise in the given

technology


Timing of Supplier Integration Field studies suggest that certain types of

suppliers are more likely to be integrated earlier

In general, face-to-face discussions are quicker,

and information can be exchanged more

effectively

At a U.S. electronics manufacturer, the supplier’s

level of involvement may vary. To get a good

quote, the supplier must be brought in early and

sit in on the customer negotiation meeting


Integrate Suppliers at Different Stages

Spring 201130


The Future of Supplier Integration They expect to increase their use of supplier

integration in the future, and to involve suppliers

earlier in the development process than they do

now

On average, the respondents considered the

supplier integration have been fairly successful


The Future of Supplier Integration “We are currently satisfied with the results of our

supplier integration efforts.”

“Expectations about the results to be achieved

from supplier integration will increase

significantly.”

Many companies realize the importance of

supplier integration, but have not yet perfected

the process to successfully implement it.


Developing Suppliers’ Capabilities In the early stages of new product development,

a new product/commodity team may visit

suppliers and find that they will have problems

meeting performance expectations

This often involves working directly with the

supplier to identify and resolve problems. Help

may come in the form of process engineering

support, financial support, or even support from

within the supplier community itself


Developing Suppliers’ Capabilities Process Engineering Support

Financial and Facility Support

Supplier Associations


SummaryCompanies must recognize that supplier involvement in

new product development can have both positive and negative impacts on technology risk and uncertainty. Organizations need to capitalize on the positive aspects of supplier involvement recognizing:

The supplier may have greater experience or expertise with the technology and, as a result, may have better information about where the technology can be successfully applied.

Some (or all) of the technological risk may be taken on by the supplier.

The buying firm may have some ability to influence the direction of the supplier’s R&D efforts in order to match developing technologies with the buying firm’s technology strategy.


SummaryIf a closer relationship between the buying company and the

supplier develops as a result of supplier involvement, the supplier may be more willing to share information about its new/emerging technologies with the buying company. The buying organization may also provide various types of supplier development assistance to help motivate this information exchange. However, organizations also need to recognize that:

Involvement with a supplier may tend to lock the buying company into the supplier’s technologies. This makes initial selection of the supplier a more critical issue, as the buying company needs to anticipate whether the supplier will remain a technology leader.

A supplier with an “inside track” may not have as much incentive to innovate, slowing the pace of technological advancement. The buying company must find ways to ensure it is getting the supplier’s best efforts.

New Product Development-seminar6 Spring 201137


Thanks for your attention…

Spring 2011New Product Development-seminar638

customer supplier integration

Documents

development needs

new products

needs5 spring

fulfilled4 spring

npd project13 spring

supplier able

important needs

suppliers technology