| Many organizations are trying to become more competitive by leveraging not only their capabilities, but the capabilities of their suppliers. While the benefits of close buyer-supplier relationships are highly touted in the managerial literature (Speckman, 1988; Johnston & Lawrence, 1988; Byrne et al, 1993), few broad-based empirical studies have quantified these benefits.;This research studied supplier involvement in their customer's product development to determine the effect on project technical success and product development cycle time. A conceptual model of supplier product development involvement was developed and tested. The model built upon information processing theory (Daft and Lengel, 1986), empirical product development research, and case studies. The model proposed that supplier capabilities, specific buyer management techniques such as early supplier involvement, and integration of supplier activities into product development increase project technical success. Survey research was used for model refinement and testing. Surveys were returned by engineers in 79 assembly industry firms. The industries studied included machine tools, industrial equipment, process control equipment, and computers.;Findings show that only three of the dimensions tested were significantly related to project technical success. Supplier proactiveness--defined as cooperativeness, supplier initiative, and openness--was positively related to project technical success. Interaction between the buyer and supplier including buyer initiated supplier improvements was negatively related to project technical success. A negative relationship was also found between the frequency of written communication and project technical success. Two dimensions were positively related to performance versus the project's schedule: supplier engineering capabilities and the frequency of verbal communication. Interestingly, early involvement of the supplier and increasing the supplier's role in component design were not significantly related to project technical success. Research in the automotive industry(Clark, 1989; Clark & Fujimoto, 1991) suggested that these management techniques can improve time performance.;Selecting a proactive supplier to work with during product development may increase project technical success. Frequent written communication may signal that a project is headed for problems and should be investigated. Opportunities for future research include further study of the content of buyer-supplier communication during product development. |
