TOPIC : Early supplier involvement.
Over the last few years development of New Products for engineering industries especially in automobile and in auto component industry has become increasingly important. Companies are under tremendous pressures to improve order to delivery lead time to customers. Suppliers are an integral part of how you do business and you take a long-term view of these relationships to drive sustained results. We believe suppliers can be a critical component in your ability to innovate and deliver sustainable value."
In this article we focus early suppliers involvement in the development of New Product .
Early supplier involvement is generally defined as a form of vertical cooperation in which manufacturers involve suppliers at an early stage in the product development and/ or innovation process.
Involving suppliers in NPD is one way of gaining strategic flexibility through reduced cost, reduced concept-to-customer development time, improved quality, and access to innovative technologies that can help firms gain capture market share .
Generally there are three NPD process and activities ie planning, design, and production.
The planning stage activities refers to the functional specification of the new product such as general product definition, lead time requirements, definition of interface specifications, platform/architecture design specifications, and outsourcing decisions.
The design and production stages are often referred to as the detailed engineering phase where bill of materials (BOM) and drawings are generated, prototypes are built and tested, manufacturing processes and equipment are selected and qualified, and so on. Supplier involvement in the NPD process can take place at all three stages.
One of the main advantageous in involving suppliers early in the NPD process is to gain better leverage of suppliers' technical capabilities and expertise to improve product development efficiency and effectiveness. Using suppliers' knowledge and expertise to complement internal capabilities reduce concept-to-customer cycle time, costs, quality problems, and improve the overall design effort. If the supplier does not have the technical capabilities, then the firm has to either help the supplier to improve its capabilities, or substitute the supplier for a better one. Problems may rise, such as resistance from purchasing and engineering departments when the supplier does not have a finished product to base their decision on .
Some of the major risks in this are include leakage of information, loss of control or ownership, longer development lead time, Depending on the product and parts technical needs, design requirements and commitment to customer, management has to take appropriate decision on make or buy.
In the automotive industry, for instance, outsourced components are typically classified as: supplier proprietary parts, detail-controlled parts, and specific designed parts .
Regarding supplier proprietary or Branded parts, suppliers are responsible for functional specification and detailed engineering activities.
Regards to detail-controlled parts, buyers are typically responsible for functional specification and detailed engineering activities.
With specific designed parts, buyers determine the functional specification activities while suppliers typically carry out detailed engineering activities. These components, to a great extent, dictate the degree of supplier involvement in NPD and how they cooperate to solve technical problems.
Buyers will get an access to suppliers cost table and the same can be verified during production later.
Now it is up to the industries to tap the Best from their suppliers.