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Customer and supplier integration
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Customer/Supplier Integration Into New Service Development
Salman Mousayi rad
Armin Kia
Mina Kashefi
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Outline
• Customer need assessment
• Customer integration
• Supplier integration
• Supplier Risk Assessment
• Supplier’s Technology Roadmap
• Timing of Supplier Integration
• The Future of Supplier Integration
• Developing Suppliers’ Capabilities
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The activities concerned with the recognition, gathering and clarification of customer needs and their importance to determine need specifications and objectives for new products/ service .
Sometimes the concept is extended to cover also the activities ensuring that all the important needs are fulfilled
Customer Need Assessment
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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 services or products currently used are the most
successful and why
Obtain reactions to a new product/service or solution
Anticipate future challenges or needs
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Customer Need Assessment Matrix
A word or phrase in
the customers terms that states the
need, issue or problem
to be solved
Description of the
customers desired
outcome.
Provide the reason
that the attribute
is important
to the customer.
List the customer requirements in
qualitative, quantitative, or
comparative terms..
A numerical rating or ranking
designation the
importance of the
outcome to the
customer
A numerical rating of
how satisfied the customer is
with the outcome when the
services are offered
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Better ability to recognize customers’ future needs
Improvement of direct contacts and cooperation
between the service development and customers
More organized and careful co-operation with the
most advanced lead-customers
Development Needs
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NHS South West Essex case
• Conducting Research
• Service reconfiguration
• Questionnaire
• The new service pathway is outlined in the following steps:
Referral and health needs assessment
Service Selection
Lifestyle Modification
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Why Supplier Integration is important
Strong link between supplier involvement and team performance
Contribution of suppliers in competitive advantage specially in
R&D researches
Studies found performance improvement outcomes from supplier
integration
Length of buyer/ supplier relationship has a positive effect on
product/ service development efforts
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most important Factors in supplier assessment
Understanding the focal suppliers’ capabilities and design expertise
Conducting a technology risk assessment
Weighing the risks against the probability of success
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Key questions in supplier integration
Which suppliers should be involved?
Is the supplier able to meet our requirements?
Is the supplier’s technology roadmap aligned
with our technology roadmap?
Given the level of technical complexity, to what
extent should the supplier be involved in the
project?
When should the supplier become involved in
the project?
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Supplier Integration Approaches
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Design Flexibility andCost of Design Changes
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Different Degree of Supplier Integration
No Supplier Involvement
White box Gray Box Black Box
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Process Model for Consensus on Suppliers to Integrate into NPD/NSD
Identifying Desired Supplier Capabilities and Potential Suppliers In sourcing or out sourcing
Specify roles and responsibilities it requires of
suppliers selected for new product/service
development?
use those primary criteria in supplier
selection, negotiation, alignment, and
relationship management.
Risk Assessment16 of 37
Important factors in considering new or existing suppliers:
Targets
Timing
Ramp-up
Innovation and Technology
Training
Supplier Risk Assessment
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comprehensive risk assessment
What is the likelihood that this supplier can bring the product/service 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?
Risk Assessment18of 37
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
Risk Assessment19 of 37
Two options when supplier’s capabilities are not at desired levels
• different suppliertechnology is not critical
• develop and improve the
suppliers’ capabilities
technology is critical
limited numbers of suppliers
Risk Assessment21 of 37
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 environmental compliance, quality, technical capability, and cost.
Risk Assessment22 of 37
Assessment of Supplier’s Technical Capabilities
• short-term and long-term alignment- 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
Assessing the Supplier’s Technology Roadmap
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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/service plans.
• In turn, suppliers may need to alter their technologicalplans to align with those of major customers.
Technology roadmap25 of 37
maintain a competitive edge
– continuously monitor competitors’ products, processes, and supply bases
– suggest modifications to current sourcing strategies.
Technology roadmap
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Assessing the Rateof Technological Change
The rate of change in service 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 servicesTechnology
roadmap28 of 37
If a particular technology is changing rapidly, then
involving the supplier early has potential pitfalls:
the buying company may become “locked into” a
particular design or technology, release the
products/services, and discover that the
technology has become obsolete or has been
replaced by a technology with improved
performance characteristics
STOP
Technology roadmap29 of 37
Timing of Supplier IntegrationCompanies should consider two major factors when
deciding when to integrate the supplier :
the rate of change of the technology,
the level of supplier expertise in the
given technology
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• 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 an ICT service provider, 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
timing31 of 37
Integrate Suppliers at Different Stages
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The Future of Supplier Integration
Service providers 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
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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.
future34 of 37
Developing Suppliers’ Capabilities
• Just in the early stages of new service development
• Working directly with the supplier to identify and resolve problems.
• Process engineering support, financial support, or even support from within the supplier community itself
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