Customer supplier integration

New Product Development-seminar6


محمدرائی سپیدهجهانگیری پدرام

زاده ناظم علیرضاقادری محسن

Customer/Supplier Integration Into New Product Development

Spring 20111


Success Factors of

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Customer Need Assessment

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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. Sometimes the concept is extended to cover also the activities ensuring that all the important needs are fulfilled


Customer Need Assessment(con’t)

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A Customer Needs Assessment can provide marketers with insight regarding:

Where challenges or needs existCurrent problems and whether they are

expected to increase, decrease, or stay the same in the future

The direct and indirect costs of failuresWhich processes or products currently used are

the most successful and whyObtain reactions to a new product or solutionAnticipate future challenges or needs


Customer Need Assessment Matrix

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Desired Outcom

es

Definition

Rationale

Performance Expectation

Importance

Satisfaction

A word or

phrase in the

customers terms

that states

the need,

issue or problem

to be solved

Description of

the custom

ers desired outcom

e.

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 custome

r

A numerical rating of

how satisfied

the customer

is with the

outcome when using

products on the market


Development Needs:

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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.


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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)

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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

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Design Flexibility andCost of Design Changes

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Different Degree of Supplier Integration

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No Supplier Involvement

White box

Gray BoxBlack Box


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

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Identifying Desired Supplier Capabilitiesand Potential Suppliers

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In sourcing

Out sourcing


Identifying Desired Supplier Capabilitiesand Potential Suppliers(con’t)

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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

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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)

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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?



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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

NotEnough



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When the supplier’s capabilities are not at desired levels, the new product/commodity team has two options:



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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.



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To carry out a detailed assessment of the supplier’s technical capabilities, both formal and informal approaches are required:

Informal approachA standard survey augmented by informal

evaluations based on face-to-face discussions with the supplier’s technical personnel

Formal approachThe company audits the supplier’s facilities for

enviromental compliance, quality, technical capability, and cost.


Assessing the Supplier’s Technology Roadmap

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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)

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To obtain maximum strategic benefit from the integrationof 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



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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 plans.In turn, suppliers may need to alter their

technological plans to align with those of major customers.



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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

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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)

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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 product, and discover that the technology has become obsolete or has been replaced by a technology with improved performance characteristics


Timing of Supplier Integration

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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 IntegrationField 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

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The Future of Supplier IntegrationThey 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’ CapabilitiesIn 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’ CapabilitiesProcess Engineering SupportFinancial and Facility SupportSupplier 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.


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Thanks for your attention…

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Documents

Customer supplier integration