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Involving suppliers in new product development provides organizations with a range of benefits, including shorter development time, better quality products, and lower cost of development. In this new in-depth article Dr Sanda Berar delves deeper into some of the best practices and the most common pitfalls associated with suppliers’ involvement in NPD.

Strategic technology suppliers provide organizations with access to key external technologies while also supporting open innovation. In turn, open innovation is seen as critical for increasing a company’s competitive advantage.

Seven case studies of NPD in one organization are discussed in the article.

This article sets out to explore some of the best practices and some of the most common pitfalls associated with suppliers’ involvement in new product development (NPD). To achieve this, seven case studies of NPD in one organization are discussed in the article. The discussion of the cases focuses on the role that project level factors play in shaping suppliers’ involvement in NPD.

Several factors are considered here:

  1. correct evaluation of supplier’s technology versus the product requirements;
  2. correct evaluation of supplier’s competence versus product requirements;
  3. trust between buyer and supplier;
  4. prior knowledge of supplier;
  5. complexity of suppliers’ delivery chain and of the R&D set-up;
  6. buyer-supplier power balance;
  7. supplier’s absorptive innovation capabilities.

If ignored or not properly acknowledged and managed, each of these factors has the potential to cause NPD failure. The case studies present practices through which the organization has been able to solve the development challenges and successfully launch the new products.

By Dr. Sanda Berar

About the author

Dr. Sanda Berar has over 15 years of experience in high-tech industry and holds a PhD in Economics and an MSc in Computer Engineering. She is presently with Nokia in Helsinki, heading the software department in a product unit. Previously, Sanda had worked in several high-tech companies in Romania. Between 1994-2000, she was a lecturer at Babes-Bolyai University, Romania. She also holds an honoree research fellow title with the University of Aberdeen, Business School, where she is involved in studies related to NPD.

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