Collaborative Product Development : a Purchasing Strategy for Small Industrialized House-building Companies

Abstract: Purchasing, is an important part of the production process in industrialized house-building. Uncoordinated purchasing is one of the causes for low productivity increase within the sector. Traditional purchasing strategies, used by large construction companies, may not be applicable to small and medium-sized companies. It has been suggested that traditional purchasing strategies are not favorable for small industrialized house-building companies, because the relation between the buyer and the suppliers are characterized by short term project incentives rather that long term relationships.In order to secure low process variation in deliveries, quality and time, long term relationship in a form of supply chain collaboration is suggested. The position taken is that small and medium sized industrialized house-building companies could improve their supply chain process by developing products collaboratively with their customers, suppliers or both.Case studies to analyze the collaborative product development process have been conducted at small and medium sized industrialized house-building companies. The products developed in these cases have varied from simple to complex and the results have been studied from both the supplier and customer perspective in the industrialized house-building supply chain.The results indicate that the actors are valued differently. Value is an ambiguous term. Therefore, process improvements have been studied using ‘value stream mapping’ and simulated with a strategically selected performance measurement such as lead-time. Collaborative product development can be argued to increase purchasing process productivity. However, there are barriers, synthesized from supply chain management theory, that need to be addressed. Barriers to be taken into account in collaborative product development are that small companies have limited resources, that the legal structure does not support collaboration and that differences in maturity in ‘industrialized house-building thinking’ might hinder effective collaboration. However, the results do not conclusively prove or disprove the idea that collaborative product development can be used by small industrialized house-building companies.Further research into the application of purchasing and collaborative product development in the industrialized house-building and construction context with a dynamic model where time on market will affect what processes needed to be developed between the buyer and the supplier.