國
立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
6.2 Suggestion to the industrial practitioners
The problems companies are facing are both long term and short term. Different kind of action and tactical preparation is necessary in both cases, therefore the following part is divided into two subparts – the long term action (this action is to be implemented continuously) and short term action to be done once when the immediate threat of architectural knowledge is
identified.
6.2.1 Suggestions to suppliers of long term character
In the long term run, the suppliers of buyers who are dealing with more innovative and complex products should try to promote their existing technologies as well as their plans for the future and where they wish to innovate next to their buyers – to get their plans on the radar of buyers to be present in the technology bookshelves of buyers.
The informal exchange and regular updating of their long term technology goals between buyers and suppliers and technology consultations should be supplier`s highest priority.
There are many platforms the buyers use and the suppliers can employ – be it special seminars on particular technology problems organized by the buyers, or in some cases through media (Digitimes etc) and even newsletters or word of mouth in between the engineers might be of benefit.
Also, it is a good idea to set a regular meeting between the top management of both companies, where the top management has the chance to meet up and do an update on the highest level as well. This will help to clearly show what are the strategic gals of both organizations so if there is any need for strategic alignment, the managers will have a good chance to raise these issues and see whether there is any chance of cooperation. Also, increased activity of sales engineers on the lower level towards the procurement is always an good an suitable entry strategy. In this way, they will be able to create a relationship on all levels, and be there the case of any new project – the suppliers can prepare in advance for the bidding or selection.
For suppliers who deal with buyers for less complex products, the main considerations should be the cost, quality and delivery issues together with an understanding of what exact
incremental changes to their design are important, so that they can help the customers to increase the overall system efficiency. They should not rely on the relationship that much, but rather try to learn more about their customers needs and how can use the existing
relationships to communicate how can they target these needs. Being initiative is important – the customers can no possibly know what is their every suppliers specialty and therefore it is the suppliers role to up‐sell themselves a bit. But in general, such a suppliers does enjoy the major benefit of the modular design for supplier – the relative ease of switching suppliers and
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
as long as there is no incentive for them to innovate, than just continue selling the modules to whoever buys them.
Although the modularity literature shows, that suppliers does not need to concentrate on the architectural knowledge and should deepen their expertise in the component knowledge – for the long term standpoint an basic understanding of the supplier`s architectures and where are they heading seems to be crucial for the supplier`s survival. It was shown, that the buying organizations do have rather good understanding of component knowledge and will spend time to learn it. Moreover, the customers do expect their suppliers to do same and reward these suppliers with more business as they are better positioned to cooperate with them. It is therefore crucial for the suppliers to have an overall good idea of what are the architectural challenges their customers dealing with and how can they help with solutions from their component perspective. This means there might be some simple, incremental innovations of the components, which might bring new functions to the end product etc. – which the suppliers might target through study of their suppliers markets.
Plans or concepts for these are good, but the buyers will always be asking for an ready to go off shelf component first – they won`t need to wait for it and even better‐ there is less risk that the development of such an component will be failure –so they can start the system testing for it right away.
Of course, there might be substantial tooling investments in the case of an very new design – but when dealing with an architectural innovation, the main issue is usually In the interfaces and connectivity of the components rather than some substantial core changes to it – which can be prepared in advance and is something the suppliers should be ready for and should be studying.
6.2.2 Suggestions to suppliers for short term action
As shown above the supplier`s understanding of the architecture will have direct impact on their immediate actions when contacted by the buyers – supplier should try to have a number of off‐the shelf solutions to target the requirement. It is very possible, that in the case of
‧
國立 政 治 大 學
‧
N a tio na
l C h engchi U ni ve rs it y
Also, in case of more complex cooperation, the supplier should be ready to accept some level of control of the buying company over their development team. All the companies researched mentioned that they like to have the last word over the technical development as an exchange for having the chance to work on the next generation technology to the market. This will have dual impact on the supplier – firstly this should be taken into consideration when negotiating the business deal where they specify the business terms of the cooperation. Considering that the supplier is waiving some of the control over their resources and also ownership to another party, there should be some substantial benefit for that. Suppliers should be looking at specific pricing strategies, procurement numbers as well as the grace period for which they cannot market the new technology or products they just learned through the cooperation. The second impact is the technology they are about to learn through the cooperation – they should choose only such a projects, where they believe the customer has the power to set an industry
standard or that such a new innovation might be so important to other possible buyers, so that accepting such an cut off of their own managerial control over the company future should be favorable.
Also, the suppliers should take the advantage and participate on so many co‐development projects as possible – even if the business scope of such a cooperation were just marginal. The cooperation is the only way how to train and cultivate their employees to be ready for any future cooperation opportunity. It is also way how to establish the buyer‐supplier relationship.
The more the supplier is open to cooperation with the customers, the more readily they can be seen as a good potential partner for future projects, where the suppliers insight might be crucial for buyers success.
‧
國立 政 治 大 學