Supplier Involvement in New Product Development under Technological Uncertainty

Abstract: This thesis addresses the challenges that firms are faced with when collaborating with suppliers in new product development (NPD) projects under technological uncertainty. A critical observation that is made in this context is that technologies are evolving faster, making products more complex. At the same time, firms become more specialized. Due to increased complexity and specialization, firms do not possess all the necessary technologies in-house and therefore need to collaborate with external organisations to incorporate new technology into their products. Common collaborators are suppliers who become integrated into the buying firm’s NPD project. However, finding suppliers and collaborating with suppliers in NPD can be problematic. In addition, external collaborations also impact the buying firm internally, since it often needs to coordinate its departments. The purpose of this thesis is to explore supplier involvement in NPD under technological uncertainty. Challenges in supplier selection are concerned with the issues of involving new suppliers or relying on old acquaintances, managing uncertainties, the dilemma of whether to commit to long-term relationships or to maintain flexibility, and deciding on which department that is responsible for evaluating and selecting the supplier. The present study of buyers and suppliers in NPD, shows the challenges that are involved in balancing control, reaching goal alignment, and managing transactional and relational governance. Internal challenges investigate the coordination between the R&D department and purchasing in NPD projects where suppliers are involved. The present findings may be of value for firms who engage in collaborative NPD, or for firms who aim to involve suppliers in their development of new products.