Keywords: alliances, early supplier involvement, new product development, product innovation
New product development and early supplier involvement (ESI): the drivers of ESI adoption
This paper reports the results of an empirical study that probed the adoption of early supplier involvement (ESI) in the product development process. ESI is defined as a form of vertical co-operation in which manufacturers involve suppliers at an early stage in the product development/innovation process, generally at the level of concept and design. Previous research has shown that Western automobile manufacturers obtained significant benefits by emulating the ESI practices of their Japanese competitors; the bulk of research knowledge is, in fact, located in this domain. This study focused on a group of assembly-based industries outside the automotive setting to determine if the adoption and benefits of ESI are found in other domains as well. Twenty-five companies in three non-automotive industries participated in the research. A model of ESI adoption was developed and tested, and an ESI index created to determine the degree to which this practice was applied. The results reveal, among other things, that the level of ESI practice is strongly related to a higher number of supplier base initiatives, lower product integration, broader supplier scope and a higher proportion of parts purchased. Significant results were also obtained in comparisons between industry sectors and geographic regions (USA, Western Europe and Japan). We suggest that promising directions for future research include broad-based samples across industrial sectors and industry-focused empirical study.