廠商與供應商的合作關係之探討-以我國資訊業為例 - 政大學術集成

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(1) . . 國立政治大學科技管理研究所碩士學位論文政治大. y. sit. n. al. er. io. . Nat. . ‧. ‧ 國. 學. 立 R&D Sharing and Cooperation within the supply chain: the case of Taiwan IT companies . Ch. engchi. i n U. v. 指導教授：吳豐祥教授研究生：吳彥/Jan Urban 中華民國一百零一年四月. .

(2) . Abstract The purpose of this study is to better understand the functioning of knowledge sharing in the supply chain of Taiwan IT industry and face the current practice of modular component outsourcing with a theoretical threat of architecture change and modularity trap.   Today, modularity and component outsourcing became almost an prerequisite for an successful IT company. Product architectures are widespread and well defined. It is however the question nobody dares to ask – what if this changes? How can the Taiwan suppliers make sure, that they will still be in the game even if the rules change? How can they assure that their position as the cutting edge component providers won`t be taken by someone else? The basic premise of the research is, that the relationship management of supplier and buyers often seen in countries with Confucian tradition can overcome this threat thanks to deeply rooted trust and good and opened communication patterns.      This paper first introduces the Supplier‐buyer relationship theory and background on its functioning within the New Product Development (NPD) area. The study also touches on the issue of Early Supplier Involvement (ESI) into the New Product Development.   Next the theory on Modularity and Modularity Trap are introduced. Based on the literature review, I construct an research framework, consisting of two bodies: The architecture as a variable and Buyer‐supplier relationship and NPD.   The major conclusions of this study are (1) The architecture of the product to be developed is an important driver on the supplier‐buyer relationship creation.   (2) To build the relationship with buyers is important step for the suppliers, but it can only be build around technology that is important for the buyer. (3) Supplier`s understanding of architecture knowledge of its buyers is crucial. (4) The main reason to invite supplier into New product development is buyers technological distance between what they can have and what they want to have. (5) Product Complexity (number of parts and their interconnections within the product) have a positive influence on the supplier role creation. (6) All buyers have a rather good component knowledge. (7) The management alignment will be greatly influenced byt architectural attributes of the product to be developed. Keywords: Architecture, Architecture change, Modularity, Modularity trap, Buyer‐supplier relationship, knowledge management, New Product Development        . 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. ii . i n U. v.

(3) . . . . . . Table of Contents . 1 Introduction   1.1Research motivation 1.2Research objective   1.3 Research question 1.4 Outline of the study 2 Literature review 2.1 Buyer‐supplier relationship and NPD 2.1.1 Supplier pool management 2.1.1.1 Supplier segmentation     2.1.1.2 Supplier roles 2.1.1.3. Supplier influence over the design 2.1. 1.4. Reason to integrate 2.1.2. Time frame of supplier involvement 2.1.3 Development responsibility and scope   2.1.3.1 Management alignment matrix 2.1.3.2 Degree of knowledge sharing   2.2 On modularity 2.2.1 Theories related to modularity 2.2.2 Modular product and organization design 2.2.3 Dominant design 2.2.4 Architectural innovation and Modularity trap 2.2.5 Architecture Change 2.3 Architecture as variable 2.3.1 Complexity 2.3.1.1 Differentiation   2.3.1.2 Connectivity 2.3.2 Innovativeness 2.3.2.1 Product newness 2.3.2.2 Time to market 2.4 Literature review summary    3 Research design 3.1. Research framework 3.2 Research method    3.2.1 Research strategy 3.2.2 Data collection method   3.3 Sample selection . 學. ‧. ‧ 國. 立. 政治大. n. engchi. iii . sit er. io. Ch. y. Nat. al.                 . i n U. v.             .   1   2        2   3        4   5   5   5   6   7   12   13   15   18   18   20   22   22   25   27   29   32   35   37   37   38   39   40   41   42   46   46   48   48   50   52 .

(4) . 政治大. 學. n. engchi. iv . er. io. Ch. sit. Nat. al. y. ‧ 國. 立. . i n U. v.      . ‧. 3.4 Data collection 3.4.1 Primary data 3.4.2 Secondary data 4 Case presentment 4.1 Case background ‐ Asus 4.1.1 Architecture 4.1.2 Buyer‐supplier relationship and NPD 4.2 Case background – Advansus 4.2.1 Architecture 4.2.2 Buyer‐supplier relationship and NPD      4.3 Case background ‐ Sanav 4.3.1 Architecture 4.3.2 Buyer‐supplier relationship and NPD 4.4 Case background – Thermal Management company 4.4.1 Architecture 4.4.2 Buyer‐supplier relationship and NPD 4.5 Summary on cases presented 5 Research findings and discussion 5.1 Architecture as variable 5.1.1 Product innovativeness as involvement driver   5.2 Buyer‐supplier relationship and NPD 5.2.1 Relationship importance 5.2.2 Architecture knowledge   5.2.3 Reasons to invite suppliers 5.3 The relationship between “Architecture as a variable”   and “Buyer‐supplier relationship     in NPD” 5.3.1 Complexity and supplier roles 5.3.2 Component knowledge   5.3.3 Managerial alignment 6 Conclusion and suggestion   6.1 Conclusion 6.2 Suggestion to the industrial practitioners 6.3 Research limitations 6.4 Suggestion to the future research 7 Literature . .   53   53   54   55   55   56   58   63   64   66   71   72   73     77   78   80   84   89   89   89   91   91   92   94   96       96   97   99   101   101   103   106   107   108 .

(5) . List of Tables Table 1: Supplier roles Table 2: Supplier roles in Product Development Table 3: The modularity trap Table 4: Research framework definition – Architecture as variable Table 5: Research framework definition – Buyer‐Supplier relationship in NPD Table 6: Situations for different research strategies Table 7: Sources of evidence Table 8: The architecture matrix Table 9: Companies studied Table 10: Architecture as variable Table 11: Buyer‐supplier relationship and NPD . n. Ch. engchi. v . sit. . er. ‧ 國. io. al. . i n U. v.    . ‧. Nat. Figure 1: Outline of the study   Figure 2: New Product development process Figure 3: Integrate suppliers at different stages Figure 4: Mapping functional elements Figure 5: Modular trailer architecture Figure 6: Research framework Figure 7: PC/Laptop components conceptualization   Figure 8: Motherboard components conceptualization Figure 9: GPS components conceptualization Figure 10: Heat pipe components conceptualization   . 學. List of Figures . y. 立. 政治大. . 8 11 34 47 47 49 50 53 54 84 86 . . 4 16 17   36 36 46 56 64 72 78 .

(6) . Chapter 1 – Introduction This first chapter is to provide reader with basic overview on the topic and researched area. We will begin with discussing the research motivation and background on the topic. Next I introduce the research objective followed by more defined three research questions. Finally, the outline of the study is presented. 1.1. Research Motivation . As a student of innovation management, I often feel fascinated by the amount of coordination necessary to develop one single new product – not only the tremendous amount of managerial work inside the company but also the coordination with the outside partners who often posses critical assets.   In today business environment, we often hear terms like outsourcing and core competencies, the modular design and with it connected loosening of managerial alignment – these patterns are designed to ease the managerial coordination when developing very complicated artifacts such as IT and computers. However, such an approach wasn`t always the common practice in the industry and also its future is unsure. . 立. 政治大. ‧. ‧ 國. 學. n. al. er. io. sit. y. Nat. A textbook example showing the shift from integral to modular is the case of IBM and its transformation in early 90`s. In the early 1980`s, IBM was more or less the whole computer industry, with only very few competitors to be accounted for. At this time, the company was building its products almost exclusively with internal capabilities and without help or interference of any other organizations. The company (same as its main competitors at that time Hawlett – Packard and DEC – Digital Equipment Corporation) was highly integrated. The companies tended to provide most of the key elements of their own computer systems – the products were closed to other developers and not compatible with each other. During this period, IBM`s business model was to provide the overall systems and service package, which kept all other competitors at bay – they were not able to compete with single product of better performance. In 70`s, IBM was challenged by Apple Computer, an young and small start up at that time. IBM` challenge was multiple ‐ they needed to create a new product, a new process to manufacture it and also a new supply chain to feed the product and also distribute it at the same time. The issue of high costs arised and IBM, in order to keep the costs down chose the modular design with an modular supply chain. The design was mainly build around two companies – Intel and Microsoft. IBM moved from vertical integration to horizontal, and the dominant was no longer the IBM computer, but rather IBM compatible computer. This was very important move, opening the closed architecture to new entrants, who were free to join the game as long as their products were IBM compatible. This was the development, which lead to . Ch. engchi. 1 . i n U. v.

(7) . the shift to modular architecture in the computer industry and situation, where components designed and build by different parties were interchangeable inside the computer. The modular architecture created a great deal of competition within each segment of the horizontally structured industry. There appeared new sub‐industries within the industry – not only for microprocessors and operation systems, but also for peripherals, software, network systems etc. And within each of this category, a new start ups and businesses emerged, making it much easier and more convenient for a computer making company to shop around just for the right combination of components, based purely on the design needs of the particular assembler.    However, the competition in modular industries is fierce, and inevitably leads to commoditization of goods – as they are all directly substitutable from other companies (competitors) with small or almost none switching costs. Therefore the competitors are mainly focused on their survival rather than on radical or even architectural innovation, which might well differentiate one`s products from the competition. This is the reason, why IBM has literally turned itself inside‐out, becoming a merchant provider of the basic components and technologies it previously guarded so jealously for exclusive use in its own products (Sturgeon, 2002). . 立. 政治大. ‧ 國. 學. ‧. The reasons for such an shift, are threefold: modularity allows the different parties involved to manage the extreme complexity, it enables parallel work which is important for lowering leading development times in the product development cycle and lastly but not least – modularity is tolerant to uncertainty – which means that particular elements of the modular design might be change a posteriori the development, and in unforeseen ways as long design rules are obeyed (Baldwin and Clark, 2001). . sit. n. al. er. io. 1.2. y. Nat. Research Objective . Ch. engchi. i n U. v. Modularization and so called black box outsourcing was huge change to the business environment where the companies had to completely rethink their strategies in order to find suitable solutions to new situations. They often had to go from vertical to complete horizontal, changing the ownership of the old business units to new independent equities and often finding   new sources from outside where their own were not up to the standard. The greatest advantage of modularity is the ease of business exchange it introduces – there is not much all the partners need to discuss or change, since they are buying and selling modules that work in very similar way. This is very much true for both sides ‐ buyers and suppliers – where the buyers have a range of sellers for the same component, where sellers once refused by one buyer can sell the very much same component to somebody else and easily switch the customer as long as they employ the same interfaces and standards.   2 .

(8) . My question was ‐ what would happen once the standards change? How can the suppliers react? How can they fast learn the new interfaces and procedures to deliver products needed? I employ the “Modularity trap theory” as described by Chessborough and Kusunoki and apply findings from the buyer‐seller relationships studied in Japan and elsewhere in the world to research  possible cooperation schemes between the possible suppliers and their customers in the knowledge based IT industry of Taiwan. 1.3. Research Question . . Do all the companies manage their suppliers in the same way? Are all the suppliers same important? . . What are the main factors to employ the suppliers into the new product development? Under what circumstances are buyers more likely to work with the suppliers on the new product development? . . What are the main problems and challenges when managing suppliers in the new product development? Are there any risks involved when suppliers work in the new product development? . ‧. ‧ 國. 學. y. sit. n. al. er. io. . Nat. . 立. 政治大. . Ch. engchi. 3 . i n U. v.

(9) . 1.4. Outline of the study . The outline of this study is divided into 6 chapters. By now, the chapter one is basically presented and familiar to the reader, therefore only the content of consequent chapters will be briefly discussed below. Figure 1 visualizes the outline of this study. . . . .   . 1. INTRODUCTION . 2. LITERATURE REVIEW . . 3. CONCEPTUAL FRAMEWORK . . 政治大. 4. CASE PRESENTATION . . 立. . 5. CASE ANALYSIS . ‧ 國. 6. FINDINGS & CONCLUSION . . . ‧. . 學. .      Source: this research  . y. Nat. sit.     Figure 1: Outline of the study   . n. al. er. io. The chapter 2 provides the reader with an overview of the literature related to the three research questions as well as on previous findings on the modular theory and modularity trap to provide the reader with necessary theoretical background.   Chapter 3 describes the frame of reference of the study, where in the light of the reviewed literature I do create a conceptual model for the study and subsequent research (and questionnaire) as well as an visualization of all the variable into a frame of reference. Also, I discuss the research method selected at this place.   Chapter starts with introduction of the four companies and their products and follows with the body of research, with presenting the cases content and data gathered during the interviews. I create a table with brief resume that summarize all the major findings at the end of this chapter.   Chapter 5 includes analysis and research findings, which were the basis for the conclusion and recommendations in the chapter 6.  . Ch. engchi. 4 . i n U. v.

(10) . Chapter 2 – Literature review The previous chapter provided the background and outline of the study, clearly showing what is the problem I want to analyze and leading to specific research questions. In this chapter, I review earlier cases and papers from within my research purpose area.   The aim of this chapter is to provide relevant literature in the fields of modularity, modularity trap and supplier‐buyer relationship management.   2.1  Buyer‐supplier relationship and New Product Development The study of supplier‐buyer relationships was an important field of the management study in late 80’s and early 90’s.   The organizational studies were trying to explain the reasons why Japanese producers can be more efficient, have faster time to markets and overall higher innovative products with better quality than their American counterparts ‐ even after the cost issue in Japan and US narrowed.   Many studies point out that the reasons Japanese companies were able to get their momentum was due to their strategic and skillful vendor management. . 立. 政治大. ‧ 國. 學. sit. y. Nat. . ‧. This first part of the Chapter two is divided onto three major parts – on the Supplier pool management, Time frame of supplier involvement and Development responsibility and scope. . n. al. er. io. 2.1.1 Supplier pool management . i n U. v. Here I introduce the reader with considerations connected on how to manage suppliers during the new product development. I will tackle on buyer`s considerations like how they choose the right suppliers, how they do analyze their capabilities and how to motivate them to be interested and participate in the project – creating an relationship with the selling company being an integral part of all of these considerations.  . Ch. engchi. 5 .

(11) . 2.1.1.1  Supplier segmentation . . Jeffrey Dyer (1994) in his essay on strategic supplier segmentation compares 3 models in the auto industry, all based on company nationality – his comparison includes Japan, Korea and American car manufacturers.   He defines two main ideas – the “arm length” and “partner” relationship. The arm length model is a traditional model, when buying companies (customers) try to minimize their dependence on suppliers and on contrary tries to maximize their bargaining power. The main idea is that the buyers “deliberately keep suppliers at “arms‐length: and avoid any form of commitment” (Dyer, 1996)   This model was generally accepted as the most successful model of managing suppliers until the rise of Japanese firms, who did not use this model but they employ rather very antagonistic type of model.   The other side of the spectrum is the Partnership model. The Japanese companies can enjoy superior position to the American companies because they can share more information and better coordinate all related efforts when managing their suppliers as partners, as well as invest in relation‐ specific assets and lower the costs, improve quality and speed in the product development. (Clark and Fujimoto, 1991) The drawback can be that these partnerships tend to be more expensive to set up and maintain – and may reduce customers ability to leave such relationship once it meets the dead end. . 立. 政治大. ‧. ‧ 國. 學. n. al. er. io. sit. y. Nat. The findings of Dyer`s study suggest, that historically the US companies managed their suppliers on the arm‐length basis, where Koreans incline to use the Partnership model. It is interesting to mention, that Japanese companies (Toyota and Nissan) would mostly choose the relationship depending on the nature of the component – and it were only Japanese companies, who would strategically segment their suppliers in such a ways, that they could benefit from both arms‐ length and Partner relationship. (Dyer, 1996) . Ch. engchi. i n U. v. In his further works1, Dyer suggests to segment suppliers into several groups according to the output they provide. The first group are suppliers, who provide necessary, but non‐strategic inputs where the other group provides strategy inputs. The meaning of strategic inputs are inputs, that are directly connected with the core competencies of the purchasing firm and may be useful in differentiating the buying`s firm product in the marketplace. This second group would form suppliers applicable for the partnership model. (Dyer at all, 1998) This idea was further developed by the revolutionary work of Rajan R. Kamath and Jefrey K. Liker. Their paper first time appeared in the renowned Harvard Business Review, and set up a                                                              1. Dyer, J.H., Cho, D.S., and Chu, W. (1998), “Strategic supplier segmentation: the next ‘best practice’ in supply chain management”, California Management Review, vol. 40 No.2, pp 57 – 77. 6 . .

(12) . starting position in supplier management and assessment of their abilities and segmentation. Kamath and Liker studied suppliers of the leading Japanese car companies, their business relationships as well as how can these relationships shaped during the time. They came up with four supplier roles, based on the competencies the car maker expected from these suppliers. This is important and it show us, that there will be different relationship and trust models between different companies. These are partially based on the technology the suppliers provide, but they also state, that these might change over time – depending on to what level the supplier wishes to bring the relationship and what would they do for it.   They even strictly state: “Not all suppliers are equal” – meaning that the car company would expect different complexity products from different suppliers and would not ask them to participate on projects, if the complexity is far beyond the suppliers understanding and capability. Only a very small and elite group of the first tier suppliers does actually participate on the product development projects (typically Japanese automakers would have around 100 to 200 first tier suppliers) and these suppliers are merely treated as equals to the brand companies.     Of course, this is connected with their size and thus their ability to actually participate and invest into special tools necessary for product development necessary to keep such an relationship (such as CAD, prototyping facilities and R&D capabilities). These suppliers must be valuable for the customers, so the customers would actually keep them on their list for future project developments – in case they are not able to deliver any value added, and instead specialize in assembly etc. they are easy to replace. The superb component knowledge and development capabilities are what the suppliers invest into these relationships. Of course, this implicates risks for the suppliers, since they need to decide what technologies to develop and what are the important investments connected with these. Therefore, the top suppliers must be very selective and choose their clients accordingly.  . 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. . Ch. engchi. i n U. v. 2.1.1.2  Supplier Roles   Kamath and Liker (1994) introduce the following four supplier roles. At the same time they note that these roles may not same for every relationship – some companies might choose to become an partner with their customer (or even on the component level) to develop certain product critical for their (supplier`s) future, but in regards to other companies (or components) they might choose Mature or even Contractual role. This all depends on the strategic motives of the supplier and also the nature of its relationships with its customers.   7 .

(13) . Table 1: Supplier roles . 立. 政治大. ‧. ‧ 國. 學 y. Nat. io. sit. . n. al. er. Source: Kamath and Liker, 1994 . Ch. i n U. v. Partners are the top on the list and they often also are the leading companies among the suppliers. They might be thought as a full‐service providers, who are responsible for development and coordination of whole subsystems. Since in Japan, the car makers would frequently communicate only with the first tier suppliers, these suppliers are than responsible for further coordination on these projects.2 They usually participate in planning a new model even before the concept stage.  It is very common, that the their understanding of own processes and – and their component know‐how and technological capabilities are far superior to their customers and it is often Partner`s, who suggest solutions to meet their customer`s price and performance objectives. They have their own testing capabilities, and they also help . engchi.                                                              2. Although this has been changing in recent years as the consequence of the worsening economic situation – some of the companies are actually pursuing strategy called “Cherry picking” – the automakers would purchase suitable components from 2nd or even 3rd tier suppliers and buy them by themselves – and then provide these to the 1st tier suppliers for assembly into the new subsystems. This allows the car makers to “cut ff” the 1st tier suppliers margins added on every component purchased by them.   8 . .

(14) . out with the customer parts testing, as their insights might be beneficial. (Kamath and Liker, 1994) These suppliers are an “arm of the customer” –even during the pre‐concept phase the partner and the customer jointly determine the specifications of the subsystem – and because of the complexity of the subsystem – and its connections to the other parts of the whole system – the Partner must open intensive communication channels with the customer. The common strategy of Customer having supplier`s engineers present on their plant is mostly the case of Partners.    The Mature role in supplier distinction is very similar to the Partner`s, however the main difference is in their lack of technological capability of Partners. They are able to develop very advanced technologies, and they are able to accommodate most of their customer`s needs, however they usually are not able do so alone and mostly they also don`t  participate during the pre‐concept stage – their technology background is not so strong, they may lack some of the necessary capabilities (such as dedicated R&D centers, deep knowledge about the customer`s technology etc.) and thus lack the technology insight required by customer to invite them to participate on the pre‐concept phase. Still, they are able to develop systems in the cars based on a clear specifications given by the customers, and they are given a big freedom in doing so – as long as the system meets the rough specifications given by the customer, the Mature supplier is free to be creative. They do posses an extensive testing capabilities and the customer absolutely trust their results – they might not verify the data the Mature supplier provides along with the prototype – the customers simply trust that they are correct. The intensive communications between Mature suppliers and Customers however begins one step later than in the case of Partners – namely at the concept stage and then continue to the production   . 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. i n U. v. The Child role influence over the design in the product development phase is even lower. Although it might be possible for the Child supplier to have a limited participation during the concept stage, this would be for consultations on a very specific design issues, or to provide insights thanks to their expertise commonly connected with procedures or materials. Also, the extent of these consultations would be rather low, with one or two meetings only and it is the customer, who will actually do the final decision – these consultations are of informational character only. Their major responsibility is to work out the details of the design and building up the testing prototypes. The customers will do on their own internal assessment of the data provided by the Child supplier among the prototype. As well the communication among the supplier and customer is rather low until the prototype and production phase, when it would eventually increase on intensity. Still, it won`t be of that intensity as with the Partners or even Mature suppliers. These supplier roles are often eligible when manufacturing part or systems that are very simple (and therefore does not involve much of coordination with others) or with only very little technology change – therefore no need for extensive communication and . Ch. engchi. 9 .

(15) . coordination. Often, these suppliers are simply not that big as Partners and Mature, so they simply cannot afford the huge investments into the development of new technology. Still, there might be cases of Mature or even Partner suppliers, who choose to pursue this (Child) strategy for some of their technologies, where they don`t see any further possible development, and thus it would be futile to further invest into it. On contrary, they would simply try to “Milk the Cow” – get as much as possible from an old technology and abandon it once its useless.   The Contractual supplier role is the lowest in the above presented chart – they simply manufacture parts based on exact customer`s requirements – which position these suppliers among the standard parts or commodity manufacturers. This is mostly the case, when they posses some sort of competitive advantage in the production capabilities (e.g. large scale automation) and the customer simply transfers his design over to the supplier so they can enjoy the low prices and higher flexibility than doing these parts by themselves. There is no need to communicate in the pre‐concept and concept stage, there might occur some communication in the late prototype stage as well as during the production phase, though the communication activity is still much lower than with the other roles. Supplier, who produce easy, routine products does not need to be treated as Partners. Although the suppliers often make their target to move up in the ladder this might be a very expensive and dangerous move from their current position. Since they need to broaden their technology base and also invest heavily, they should strategize ad choose their customers for such a move carefully.  . 立. 政治大. ‧. ‧ 國. 學. n. al. er. io. sit. y. Nat. It is important to note, that even though it might seem, that the health of the relationship is crucial to obtain the business with the customer, it is not the only variable. Often, more suppliers compete on the same project and only the best will be granted the project – often the engineers dispatched to the customer on the supplier`s behalf find out, that they work along with other supplier`s engineers during the design, but sometimes even during the production phase. This might be true for all first three supplier roles (Partner, Mature and Child).  This is due to the fact, that although the relationship is important for both suppliers and customers, it is the actual value the suppliers give to the customers that matters – not the other way around.  . Ch. engchi. i n U. v. Timothy Sturgeon (2002) in his breakthrough essay “Modular Production Networks” creates a very similar concept to the Partner Supplier of Kamath and Liker. He calls these the “Turn‐key” suppliers.   These suppliers evolved from a great number of smaller companies, that evolved from the outsourcing era of late 90`s. The leading firms (customers) were undergoing the process of re‐ structuration – they were getting rid of non‐core asset or assets where they were not competitive at all. As a subsequence, these leading companies would specialize on their “core assets” only. In the beginning, the industrial landscape seemed to be characterized by a great 10 .

(16) . number of small companies, that will choose to be highly specialized in one of these shed “non‐ core competencies” and these would ultimately become their own “core competency”. This however did not happen.   These suppliers, in order to meet their customer`s growing demands for full‐service outsourcing solutions, had to invest heavily into their technology development and often develop their competencies not only in few, but rather in many competency areas so they would meet their customer demanding needs, who would often outsource whole systems. Of course, hand in hand to this trend, they also had to push down their costs, rise quality, delivery as well as increasing their scope of activities. This deepened the knowledge and abilities of these suppliers, however without much of assistance, or even dependence on the leading companies. Not necessary to mention, that this increased outsourcing, as well as having a great number of similar customers with similar products allowed these suppliers to grow significantly.  . 政治大 “Thus outsourcing has led to a deepening of competence and increase in scale at supplier firms” 立 (Sturgeon, 2002) ‧. ‧ 國. . 學. . Table 2: Supplier roles in Product Development . n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Source: Kamath and Liker, 1994 11 .

(17) . 2.1.1.3 Supplier`s influence over the design As mentioned earlier, the suppliers may have some influence on the overall product architecture – due to their possession of some critical or strategic component, their extensive and unique insights into the technologies which might come handy during the early stages of the product development or simply due to their relationship with the customer, who might be willing to listen to them due to the long term cooperation history.   Kamath and Liker (1994) mention, that it is usually only the Partners who might have some actual and intended influence over the end architecture – they have the scope, posses great deal of technological knowledge which is praised by the customers as well as they usually provide the customers with system or subsystem solution of strategic importance, and it might be too costy to alternate these instead of changing the overall design. In this way, these companies are real equal counterparts to the customers and their negotiation power is huge – they have the strength to negotiate the customer into the direction they wish.  . 立. 政治大. ‧. ‧ 國. 學. The Mature suppliers might have chance to influence the end design to their favor, but this influence is only very limited and usually they would have to reach some sort of understanding with the customer – their technology capacity is not that strong as of Partners and they don`t have the strength to make the customers move in the strategic direction they would like to. Instead, its usually them, who would follow the customer`s strategic vision and develop the products as the customer wishes. Still, since they do understand the technology rather well as well as they posses quite good architectural knowledge, they have the strengths to raise their hand and point out possible problems to their components originating from the architecture design flaws – and have the customer change these.  . n. er. io. sit. y. Nat. al. Ch. i n U. v. The importance of the Child and Contractual is rather low and also their influence over the overall design is rather negligible. They develop the components based on the blueprints and even though they posses good component knowledge, their understanding of th overall architecture is usually superficial and thus they are not in position nor expected to raise concerns about their components functionality within the architecture.   . engchi. 12 .

(18) . 2.1.1.4 Reasons to integrate The following or similar definition of early supplier integration (ESI) into New Product Development was often used in number of studies about this topic. As we can see, it mentioned two major management issues – namely the co‐decision making ability as well as free information sharing. In the text below, we will see why and how to do so.   ‘Supplier integration into new product/process/service development suggests that suppliers are providing information directly and participating in decision‐making for purchases used in the new product/process/service. This integration can occur at any point in the five‐stage new product/process/service development model.’ (Ragatz et al, 1997) ESI usually occurs at an early stage of the life cycle of product, generally at the time of product concept or design. This cooperation has usually a form of specific vertical coordination, when manufacturers involve suppliers. (Bidault et al, 1998) . 立. 政治大. ‧. ‧ 國. 學. There are numerous reasons to involve suppliers into the New Product Development. The main is often reducing new product development times – by using the supplier`s technical capability as well as many “off the shelf” components instantly available through the suppliers instead of going through new product development for these.   Others might be managing the costs, by giving out clear targets and discussing these with suppliers – they might be more insightful about what is realistic and what not.   Improving the product quality is also important consideration – since through early supplier integration can open a new channel for quality evaluation and management.   Collaboration allows for cross‐disciplinary integration, which might be essential for creating really new and innovative products.  . er. io. sit. y. Nat. al. n. v i n Ch There are however some drawbacks of ESI as well. Such might be increasing product and U i e h n c g development costs, mismatching resources and involving suppliers into improper tasks. . Significant issue would be organizational resistance and different corporate cultures nd most notably – selecting incapable suppliers.    Also, involving only single supplier in development of crucial, strategic components of new system might be seen as a risk – due to increased asset specificity of such an supplier and his strategic importance to the customer, who might become captive in such an relationship.   Product modularity strategies are influenced not only firm`s idiosyncratic capabilities but also other parties in the supply chain (e.g. suppliers, competitors and customers), hence technological changes in components introduced by one supplier would certainly affect the performance of the system as a whole. (Hsieh, 2002) 13 .

(19) . For the suppliers, there is much more work and risks involved than for customers (OEM`s). This is due to the fact, that it will ultimately be them, who will provide most of the knowledge and do most of the work. For an supplier, it is a big question to answer whether they want to be part of the NPD or not. And in case yes, than under what conditions and why. As for the modular design, the risks of developing a new module or even system, but than being exchanged by the buyer for cheaper market option is just too high – they could simply wait for their competitors to develop the particular component, and than adapt to it once they got the chance to do so from the customers.   Therefore, it is crucial that they choose only projects, that are compatible with their future strategic plans –in the knowledge based technology the suppliers cannot risk that they would be replaced by the customers in the future because their technology knowledge is not up to date.   Velso and Fixson (2001) studied different companies in the car industry to find out, that more than often it is suppliers who foster the innovation. The reasons are, that under the modular conditions, they might develop new component, which might be compatible with other customer systems (thanks to the industry wide design rules). Therefore participation on such a new project would not only give the supplier competitive advantage over its competitors, but would also allow them to reach the economies of scale necessary for production of the new components as well as an pool of new customers.  . 立. 政治大. ‧. ‧ 國. 學. n. al. er. io. sit. y. Nat. Sometimes, their reason might be much more prosaic – Kamath and Liker mention case of Nipondenso, supplier to Honda, whose company mission is to be the best company in the industry. They would simply participate in most of the NPD projects, since they cannot accept the shame of becoming Tier II supplier in certain areas and thus losing their professional prestige. (Kamath and Liker, 1994)   . Ch. engchi. 14 . i n U. v.