Knowledge Integration and Innovation in Buyer-Supplier Collaborations

Abstract: Research indicates buyer-supplier collaborations in new product development (NPD) can have a positive impact on innovation. From a knowledge based view, it is argued that suppliers add a complementary knowledge base that is combined with the buyer’s knowledge. But what does the supplier contribution actually consist of? And more importantly: How is this supplier knowledge integrated into the NPD process? This is not clear in the literature. Different supplier inputs may imply different knowledge integration mechanisms and practices.The purpose of this licentiate thesis is to investigate how supplier knowledge is integrated into the NPD process. The focus is to explore how knowledge intensive manufacturing firms integrate different supplier inputs in collaborative NPD projects by using different knowledge integration mechanisms.To fulfil the aim of thesis a qualitative approach has been applied and by studying NPD processes in three industrial sectors. An extensive literature review and a focus group meeting are followed by two qualitative case studies that are based mainly on interviews with keyrepresentatives in the buyer-supplier collaborations. The first study investigates different supplier contributions by categorizing different supplier inputs. The second study – which is the largest part of the overall study - investigates how supplier knowledge is integrated in NPD collaborations using different integration mechanisms. Here, six NPD collaborations, representing the automotive, the energy, and the telecom sectors, are studied and compared, in order to understand the integration processes and the different knowledge integration mechanisms. The third study investigates the role of trust in capturing supplier knowledge. Here, two NPD collaborations which can be considered to be polar-cases in terms of scope and depth are compared in order to explore and explain the role of trust in the integration processes.Altogether these studies lay a foundation for a model of knowledge integration between the buyer and the supplier in NPD collaborations. The model identifies two main strategies for integrating supplier knowledge – knowledge absorption and joint knowledge accumulation.Knowledge absorption concerns innovation processes where the contribution from suppliers is focused on product- and process improvements, i.e. incremental input. Here, the development is dictated by clear specifications. Supplier contacts take place during a limited period of time and are restricted to certain phases in NPD projects. Thus, the main knowledge integration mechanism used is sequencing. In these situations, the buyer actually tries to capture and absorb the knowledge of the supplier at a specific point in the process. A basic level of trust, based on the reputation the supplier has for competence is sufficient.Joint knowledge accumulation, on the other hand, is how firms manage more radical input from suppliers, such as new technology or new design. In these cases, knowledge integration strategies extend over a longer period of time, throughout several phases of the NPD project. There is a high degree of interaction between the people involved, to find new solutions. The main knowledge integration mechanism is group problem-solving. Knowledge is jointly accumulated by sharing, combining, and creating new knowledge in open processes. In these cases, a profound level of trust is required.When integrating supplier knowledge in innovation, management has to consider the possible and preferred outcome of the collaboration; it might be a commercial deal to provide for a temporary access to knowledge, or it might be a long-term alliance, where joint learning is an aim. In the first case, a traditional NPD process with clear specifications, using sequencing and technological interfaces, will be adequate. In the second case, focus should be on interpersonal problem solving between trustworthy individuals.