Industrial Marketing Management 35 (2006) 28 – 44
Supplier integration—Controlling of co-development processes Sabine Fliess a,1, Urban Becker b,* a b
University of Hagen, 58084 Hagen, Germany Schu¨co International KG, Bielefeld, Germany
Received 1 March 2005; received in revised form 27 May 2005; accepted 27 July 2005 Available online 21 September 2005
Abstract Co-development processes are an instrument used in several industries to gain a competitive advantage and to reduce development costs. An overview of the literature is given with the identification of a gap in current literature: the patterns of supplier participation in new product development. The main goal of this article is to seek possible ways of controlling the supplier integration process in new product development. Using 12 case studies of small and medium-sized suppliers of a medium-sized European enterprise doing business in the window and facades industry, the authors recognize several problems resulting from the interaction and coordination between customer and supplier in new development processes. With reference to the problem, propositions in form of possible solutions or advice are given. A typical new product development process is illustrated in the form of a blueprint description. The results of the investigation are transferable to the new product development process of various technical products, mainly in small and medium-sized enterprises. D 2005 Elsevier Inc. All rights reserved. Keywords: Supplier integration; Co-development; Product development and innovation; Service blueprint
1. Introduction 1.1. Importance of product development with suppliers For several years, suppliers, like customers, have been regarded as an important source of innovation (von Hippel, 1988). By using a supplier’s additional resources, skills and capabilities, especially a supplier’s greater design responsibilities, companies can develop and maintain a competitive advantage by reducing costs and cycle time and by offering more customized product characteristics or better product quality. Table 1 gives a detailed chronological review of the literature on co-development processes. In collaborative product development, the concentration has been on integrating customer requirements into new product development from the supplier’s point of view (Brockhoff, * Corresponding author. E-mail addresses:
[email protected] (S. Fliess),
[email protected] (U. Becker). 1 Tel.: +49 2331 987 2433; fax: +49 2331 987 4494. 0019-8501/$ - see front matter D 2005 Elsevier Inc. All rights reserved. doi:10.1016/j.indmarman.2005.07.004
1998; Fließ, 2001; Kirchmann, 1996a; Urban & von Hippel, 1988) with a general approach to customer integration. The area of supplier integration has not received that much attention. Therefore, many managers characterize the execution processes for integrating suppliers as a black box (Petersen, Handfield, & Ragatz, 2003, p. 285 and Petersen, Handfield, & Ragatz, 2005, p. 372). The aim of this article is to bring light into the black box of the co-development process between customer and supplier and especially to identify problems of controlling the codevelopment process and to suggest means and procedures to overcome these problems. Cooperation with suppliers may be designed in several ways. The possibilities are described in Section 1.2. The analysis itself is based on 12 case studies representing the different cooperation designs. The research methodology is explained in Section 2. Results of the case studies are presented and discussed in Section 3 using a stage differentiating approach. The section ends with a summary of the propositions. In Section 4 the results are interpreted and discussed. In Section 5 the question of whether and how the insights of the
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discussion can be transferred to different industries is discussed and proposals for further research are made. 1.2. Cooperation designs in new product development There are several possible cooperation designs which can be distinguished by the type and intensity of the contractual relationship. The most important forms of cooperation are contract development, coordinated development and joint development (see Fig. 1). Contract development is based on contracts with companies (suppliers and other companies) or institutions (Hauschildt, 2004, pp. 75– 76; Kaltwasser, 1994, pp. 80; Werner, 1997, p. 80). The contract defines the object to be developed, the tasks to be done, the restrictions that have to be followed, the duration of work, the financial regulations and the regulations for the use of the results of development efforts (Hauschildt, 2004, p. 75; Wynstra, 1998, pp. 56– 58). Based on the contract, the supplier performs the development activities separately from the customer. The customer is only involved in set coordination meetings. Therefore, the possibilities for the customer to influence the development process are reduced. Contract development is useful if there are not enough resources available within the customer organization. For contract development, it is helpful if the object of development can be clearly defined, the results of development can be clearly measured and the development activities can be separated from other projects (Gerpott, 1999, p. 252; Hauschildt, 2004, p. 76). Coordinated development is based on a separation of tasks for the companies involved. That means that every company concentrates on certain tasks and components. Some tasks are performed by the customer himself, other tasks by the involved supplier(s). Three basic forms of coordinated development can be distinguished (Gerpott, 1999, p. 247; Tani & Wangenheim, 1998, pp. 26 – 27): & Asymmetrical cooperation (detailed instructions from customer to supplier); & Black box cooperation (supplier develops a single module for the final product); & Systems partnership (supplier is responsible for development of a complex part of final product and for integration of pre-suppliers). The contributions of all parties involved form the final result. This format is used for complex development projects. There are often several suppliers involved. Every supplier develops a component of the final product or takes over partial tasks within the development project. This procedure leads to a paralleling of developmental activities, and as a result, the development time can often be reduced. Joint development is based on a regular cooperation in teams with members of the supplier’s and customer’s company. That means that both partners are directly involved in the tasks of product development. The teams may be located in one place, or they may work from different
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locations with a high level of information exchange and regular coordination meetings. Joint development has a more intense level of cooperation in comparison to contract development or coordinated development. Joint development is used if the development object cannot be separated in different modules. Therefore, customer and supplier have to bring in their own resources into the development project (Gerpott, 1999, p. 252). In order to identify main problems in the controlling of codevelopment processes, case studies representing the three main cooperation designs have been conducted. 2. Case study investigation 2.1. Methodology of case studies According to Yin, a case study is an empirical inquiry that investigates a contemporary phenomenon within its real-life context, especially when the boundaries between phenomenon and context are not clearly evident (Yin, 1994, p. 13). A case study is also a research strategy which seeks to understand the dynamics present within single settings (Eisenhardt, 1989). Development processes can be characterized as very heterogeneous and a great deviation between different development projects is to be expected. In addition, the status of present knowledge can be characterized as low. Therefore, case study research was regarded as an adequate method to gain basic information. Objectives of the case study research were: & to identify relevant problems in co-development processes; & to propose possible solutions to the problems. Case studies may be concentrated on a single or a small number of case studies or on several cases. Comparisons are possible if several cases are analyzed; therefore, twelve different case studies of one medium-sized enterprise (Schu¨co) have been investigated. Schu¨co International KG is a leading company in window and facades systems made of aluminum and PVC-U and in solar products in Europe. The company is located in Bielefeld, Germany, and was founded in 1951. It has a turnover of 1.3 billion and 4500 employees worldwide. Innovation is crucial for the company to develop a competitive position in its different markets. Schu¨co International KG takes the part of the customer in the case studies. The cases were selected from different business units (aluminum-systems, PVC-U systems, complete components of installation, solar products) in order to be able to transfer the results to other forms of business. The suppliers are all small or medium-sized enterprises (SME) within Europe. The majority of the suppliers is located in Germany. Permission was granted from Schu¨co to use the company’s name in this paper. The field work for the case study research was done in two basic steps (methodology was based on Eisenhardt, 1989; Miles & Huberman, 1994 and Yin, 1994): & In each case, key personnel were asked about the activities for supplier and customer during all stages of the
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Table 1 A chronological review of the literature on co-development processes Authors
Focus
Nature of study
Findings and conclusions
Clark (1989), Clark and Fujimoto (1989,1991),
Comparing different practices in Japan, Europe and America
Empirical
Cusumano and Takeishi (1991)
Comparing different practices in Japan and America
Empirical
Brockhoff (1992)
Transaction costs
Empirical—survey
Gerlach (1992)
Comparing different practices in Japan and America
Empirical
Griffin and Hauser (1992)
Interfaces within and between the involved companies
Empirical
Birou and Fawcett (1994)
Comparing different practices in Europe and America
Empirical—survey
Dyer and Ouchi (1993)
Comparing different practices in Japan, Europe and America
Empirical
Kamath and Liker (1994)
Comparing different practices in Japan, Europe and America
Empirical
Brown and Eisenhardt (1995)
Organization of the development process— building and motivating teams
Conceptual
Wilson, Littler, Leverick, and Bruce (1995)
Organization of the development process
Empirical—case studies
Kirchmann (1996b)
Interfaces within and between the involved companies
Empirical— interviews and survey
Baldwin and Clark (1997)
Supplier involvement as a strategy
Conceptual
Dyer (1997)
Transaction costs and transaction value Identification of factors causing delays in co-development projects.
Empirical Empirical—survey
Kasouf and Celuch (1997)
Role of small suppliers
Empirical—survey
Ragatz, Handfield, and Scannell (1997)
Success factors for integration of suppliers
Empirical—survey
Allowing suppliers greater responsibilities represents an important factor in the superior performance of the Japanese car industry in product development. Most of the suppliers in US auto industry are after the completion of detailed design. Most suppliers have only limited ways to influence the product concept. Those with more mature partnerships and relationships to the customers are given more flexibility. Analysis of the impact of technical characteristics of the product under development and impact of contractual arrangements within which the development takes place. When the supplier is strongly embedded to a customer, as well as to other network suppliers, displaying a high degree of interdependence, opportunistic behavior is constrained while conditions for cooperative behavior are improved. Use of OFD leads to more efficient communication within the team and encourages more manufacturer-to-supplier communication. Analysis of different characteristics of co-development with suppliers in both continents in different industrial areas. US companies use supplier involvement more often and earlier in the process than European companies because of market pressure. Partnerships and alliances with suppliers as they are used by Japanese companies are an increasingly important strategy for firms to develop and maintain competitive advantages. Japanese practices are increasingly used in America. It is suggested that few first-tier suppliers, enjoying trust-based long term partnerships with their customers, often participate in early stages of development process. Other suppliers are given specific requirements by the customer. Integrative model of product development consisting of project team, project leader, senior management, suppliers and customer that effect process performance and product effectiveness and financial success. Identification of support factors and important risks for the success of co-development relationships to develop practical advice for the implementation of co-development projects. Identification of reasons for customer organizations for co-development, instruments of information exchange and typologies of interfaces between customer and supplier organization. Partnerships and alliances with suppliers are an increasingly important strategy to develop and maintain competitive advantages. A prerequisite for this strategy is the modularity of the products. Detailed examination of practices of Japanese firms in effective interfirm collaboration. Working with a supplier that has strong technical capabilities reduces supplier-related delays. The benefits of supplier’s responsibility for design, and greater buyer – supplier communication was not confirmed. Significant relationships were found between supplier-related delays, the priority of customer’s top management on the project and the degree of technical change to overall project delays. Factors are identified that discriminate between firms with high and low relationship orientation. Firms with a high relationship orientation are smaller and more optimistic about the industry’s ability to support a greater number of firms in the future, and perceived faster technology change. Identification of success factors for supplier integration based on used management practices and project environment factors. They distinguish relationship structuring differentiators and asset allocation differentiators for the success of a new product.
Hartley, Zirger, and Kamath (1997)
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Table 1 (continued) Authors
Focus
Nature of study
Findings and conclusions
Wasti and Liker (1997)
Analysis of supplier involvement in Japanese car industry
Empirical—survey
Wingert (1997)
Competitive advantage through supplier integration
Empirical
Bozdogan et al. (1998)
Timing of supplier involvement
Empirical—case study
Holmen and Kristensen (1998)
Division of labor between customer and supplier
Empirical—case study
Karlsson et al. (1998)
Role of product specifications
Empirical—survey and case studies
Wynstra (1998), Wynstra, van Weele, and Axelson (1998), Wynstra, van Weele, and Weggemann (2001) Handfield, Ragatz, Petersen, and Monczka (1999) Hsuan (1999)
Role of purchasing in supplier involvement
Empirical—case studies
Through hypotheses, developed based on the Japanese partnership model (relational contracting), predictions are made on the level of supplier involvement in design based on product characteristics and supplier capabilities. Competitive advantages by supplier integration. Strategic and operative configuration of the Value Adding System in the electronic industry. Benefits are possible by proactive integration of suppliers from innovations enabled by the suppliers. Each participating member provides those skills and portions of the product for which they are best suited. This requires integrated product teams, long-term commitment to suppliers, co-location, good information flow and flexibility. Using QFD technique the suppliers of a Danish company was divided into those who contribute through task partitioning and those who take part in an interactive product development process. A supplier may benefit from actively entering into the pre-development process. Implications of definition and changes of specifications to cost in a customer – supplier relationship in the auto industry. Several propositions to improve conflicts are made. An integrated framework of specific activities that constitute purchasing involvement in product development, which can help firms to implement, improve and to audit the involvement of purchasing in product development.
Supplier selection and timing of supplier involvement
Empirical—survey
Division of labor between customer and supplier
Empirical—case study
McIvor and McHugh (2000)
Organization of the development process
Empirical—case study
Ragatz, Handfield, and Petersen (2002)
Conceptual
Mikkola and Skjoett-Larsen (2003)
Supplier integration under conditions of technological uncertainty Timing of supplier involvement
Petersen et al. (2003)
Model of supplier integration
Empirical—case studies/survey
Koufteros, Vonderembse, and Jayaram (2004)
Concurrent engineering and external integration
Empirical—survey
McIvor and Humphreys (2004)
Timing of supplier involvement
Empirical—survey and case study
Empirical—case studies
Identification of supplier selection criteria and timing of supplier integration depending on the kind of product that has to be developed and on technology risks. Four different levels of modularization are distinguished: component, module, sub-system, system. A higher degree of modularization is possible when more collaborative forms of partnership are shared between the partners. To avoid problems during the development process, cultural changes in both companies must accompany successful collaborative relationships. Success requires a change in mind-set understanding, trust, and commitment to the partnership. Conceptual model of the effects of elements of supplier integration process on cost, quality, and time under conditions of technology uncertainty. The degree of early supplier involvement and of supplier-interdependence, the extent of asset specific investments, the way of supplier selection and the responsibility given to suppliers vary. Available resources of customer and supplier can be combined in new ways to improve the success of product development. A new product development project requires detailed formal evaluation and selection of potential suppliers prior to consideration for involvement. Only trusted suppliers should be approached to participate. Sharing of information can improve the process. Project outcome objectives should be shared between the partners. Supplier involvement is important when the technology is complex or the buying company does not have enough internal expertise. Concurrent engineering is regarded as the early involvement of an internal cross-functional team in new product development process. This is an important enabler of external integration with a supplier or a customer. Increased importance of supplier involvement in early stages of product development for OEM products. The analysis is based on information from the electronics industry. Cultural changes in customer and supplier organization are necessary. (continued on next page)
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Table 1 (continued) Authors
Focus
Nature of study
Findings and conclusions
Perks (2005)
Interfaces within and between the involved companies
Empirical—case study
Petersen et al. (2005)
Organization of the development process
Empirical—survey
Specification and synchronization are often critical in co-development projects. Such projects could lead to creative and valuable input if the sharing of information and control of activities is used. Supplier selection should not only consider the capabilities of the supplier, but also the culture of the supplier. Involving the supplier in the determination of appropriate technical metrics and targets for the project are key elements in project team effectiveness.
development project. This information has been visualized in the form of a process description called service blueprint (see Section 2.3). Relevant issues during the development process have been described in detail in a separate table within each process description file. & Based on this initial information about the development project, interviews with personnel from supplier and customer have been carried out. The interviewed people are the responsible project managers or managers of development departments. For small suppliers, general management was interviewed. These people have been selected because they are confronted with the real problems caused by the cooperation during the development process. There were separate interviews with supplier and customer personnel because of organizational reasons. Twenty-eight interviews with duration of 1.5 to 7 h have been made. The interviews were based on an interview questionnaire with key questions. The questions refer partly to the referred project and partly to the cooperation in product development with other customers or suppliers to gain information about general problems in codevelopment processes. Therefore, the results of the interviews are not always referring to the customer Schu¨co and his suppliers. The contents of the interviews have been recorded on a tape and later transferred to written records. The interviews have been carried out in 2004 and in the beginning of 2005. There was an average time gap between the end of the development project and the interview of 3 months.
Based on the information from the interviews, it was assumed that the problems and solutions were connected with development stages. The results from the case studies are presented in the following four stages, in accordance with literature on the subject, although there are deviations from company to company (e.g. Bu¨rgel, Haller, & Binder, 1996, p. 190; Hauschildt, 2004, pp. 459 – 460; Specht, Beckmann, & Amelingmeyer, 2002, pp. 143– 166; Vahs & Burmester, 2002, p. 133):
The analysis of the case studies has been based on different stages of development. Major decisions and developments are usually made in different stages (Witte, 1968, p. 625 –647).
The case studies have been conducted to work out some aspects that are important for the controlling of development projects with suppliers.
Initial stage Concept stage Detail engineering stage Process engineering stage/Product introduction.
In the initial stage the customer evaluates and selects appropriate suppliers, determines the starting point of supplier involvement and defines the scope of cooperation. According to our literature sources, main problems arise from know-how transfer and information asymmetry (Bozdogan, Deyst, Hoult, & Lucas, 1998; Karlsson, Nellore, & So¨derquist, 1998; McIvor & Humphreys, 2004; Mikkola & Skjoett-Larsen, 2003). As the case studies did not reveal any different problems or solutions to those mentioned in the literature, the initial stage is neglected in our analysis. In order to give specific insights, the cases were classified according to the following typology. 2.2. Typology of cases
Intensity of cooperation
Low
Internal Development
& & & &
Know HowExchange
Purchasing Licensing of components, products and technologies
Contract Development
High
Coordinated Development / Black BoxEngineering
Jointdevelopment
Fig. 1. Cooperation designs in new product development.
Contractual JointVenture
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& The case studies differ according to the know-how position of customer. The know-how position of the customer may be low, medium or high (see column 6). & The specifications or restrictions for the development may be narrow, medium or broad. In the case of narrow specifications, the customer gets exactly the required results as far as it is possible for the supplier to settle the specifications. In case of broad specifications, the supplier has much more room to bring in his own ideas (see column 7). & Differences concerning additional characteristics for the relationship between customer and supplier like trust, openness and willingness to cooperate and exchange of information can be identified. For this, the dimensions good, medium and poor relationship have been distinguished (see column 8). & The design and the controlling of the development process may be mainly carried out by both partners (joint process control) or it could be influenced by one partner (supplier or customer process control). A bad situation results if there is too little control over the development process (no process control) (see column 9).
Within the 12 case studies the following types of codevelopment process have been identified (see Table 2): & The case studies are conducted in different business units of Schu¨co International KG. These units are solar systems and for windows and facades the business units for aluminum systems, aluminum specific constructions, PVC-U systems and complete components for installation (see column 2 of Table 2). & A separation may be made between market-related products and the final customer-related products (see column 3). For market-related products, there are plans to be made for the market introduction. For final customer-related products, decisions and time restrictions of the customer have to be considered. This results in a multi-stage development process. & One typology refers to the forms of cooperation. A distinction may be made based on the three basic forms explained above (order development, coordinated development, joint development—see column 4). & There are different degrees of innovation. Some products are modifications of existing products with a low degree of innovation, other products are absolutely new with a high degree of innovation (dimensions: low, medium or high degree of innovation—see column 5).
The evaluation is based on the information given during the interviews and a subjective evaluation by the authors. In eleven
Table 2 Characterization of case studies No. of case study
Kind of product
Business unit
Customer or market related
Form of cooperation
Degree of innovation
Know-how position of customer
Specifications
Relationships (trust, information exchange)
Process design/ control
1
2
3
4
5
6
7
8
9
Complete components Aluminum systems Aluminum systems
Market related
Order
High
Low
Medium
Bad
Not any
Market related
Coordinated
Medium
Medium
Medium
Good
Customer
Market related
Coordinated
High
Medium
Broad
Medium
Customer
Market related
Joint
High
Medium
Broad
Good
Joint
Final customer related
Joint
Medium
Low
Medium
Medium
Supplier
Final customer related
Joint
Low
Medium
Low
Medium
Customer
Final customer related
Joint
Low
High
Low
Medium
Customer
Market related
Joint
High
Medium
Broad
Good
Joint
Market related Market related Market related
Joint Coordinated Coordinated
Medium Low High
Medium Low Low
Medium Medium Medium
Good Medium Good
Joint Joint Supplier
Market related
Coordinated
Medium
Medium
Medium
Good
Customer
Number of column 1 Metal/glass product 2 Plastic product 3
4
Metal and electrical product Plastic product
5
Metal product
6
Rubber product
7
Metal product
8
Metal and plastic product Plastic product Metal product Electronical product Metal product
9 10 11 12
Aluminum systems Aluminumspecific constructions AluminumSpecific constructions Aluminumspecific constructions Aluminum systems PVC-U Solar Solar Aluminum systems
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development projects, only one supplier is involved. In one case (case 3), several suppliers are involved. The three most important suppliers have been interviewed. In order to describe and take down the different activities during the stages of the co-development process, the blueprinting method has been applied. 2.3. The blueprinting method Blueprinting is a method invented to visualize service processes (Fließ & Kleinaltenkamp, 2004; Kingman-Brundage, 1989, 1995; Shostack, 1982). A blueprint can be regarded as a two-dimensional picture of a service process: The horizontal axis represents the chronology of actions conducted by members of either the customer or the supplier organization. The vertical axis distinguishes between different areas of actions. These areas of actions are separated by different ‘‘lines’’. Blueprinting has already been applied to a wide range of different purposes. Currently a development stage of blueprinting methods is being used, and it is characterized by five key action areas separated by five horizontal lines (Fließ & Kleinaltenkamp, 2004): & The ‘‘line of interaction’’ separates the customer action area from the supplier action area, representing the direct interactions between customer and supplier. Above the ‘‘line of interaction’’ we find activities, choices and interactions performed by the customer. & The ‘‘line of visibility’’ differentiates between actions visible and invisible to the customer. Above the ‘‘line of visibility’’ actions and decisions carried out by front office employees are shown. & The ‘‘line of internal interaction’’ distinguishes between front office and back office activities. Support processes, which are necessary to provide front office employees in delivering the service, are carried out beneath the ‘‘line of internal interaction’’. & The ‘‘line of order penetration’’ separates activities that are related to a current project of the supplier and customer and activities that are not directly related to the current project like support activities or the management of a company. & The ‘‘line of implementation’’ separates preparation and facility activities. Preparation activities are necessary to prepare for the process of integrating a supplier or a customer. Facility activities refer to machinery, computers, buildings and personnel that are necessary to run a company. So far, the blueprinting method has not been applied to codevelopment processes. Therefore, it is an innovative approach. The main advantage of the blueprinting method is that it gives deep insights into the supplier’s and the customer’s activities during the co-development process as it pictures the internal organization of the activities on both sides. Since the blueprint normally concentrates either on the supplier’s or the customer’s activities during a process, the blueprinting method has to be extended to show activities of both parties involved.
In the following section, the blueprints show the customer’s and supplier’s typical activities during the co-development process. The sequence of activities and the assignment to the different stages can change between different projects. Here, we stress the typical co-development process. The ‘‘lines’’ show which (controlling) activities are conducted by the customer, the supplier or in interaction between customer and supplier. 3. Controlling problems in development stages The following section shows the blueprints for each stage. The blueprints are partially a condensed and aggregated summary of activities which, in most of the case studies, have been conducted during this stage. They also contain those activities, procedures and instruments which are considered crucial for the success of the process during this stage. This means that the individual co-development process can deviate from the activities shown in the blueprints. Besides the description of the activities, the following passages contain suggestions and insights the interviewed persons gained while reflecting on the co-development process. They refer to problems which have been solved successfully as well as to instruments and procedures emphasized by persons involved in successful co-development processes. Co-development processes have been considered to be successful by the interviewees if the objectives have been reached. Mentioned objectives were the development of products according to the customer’s requirements and the fulfillment of cost, time and quality objectives. The following paragraphs will give a general understanding of the problems that occur during the development process. Helpful results for the controlling of co-development processes are summarized within the text. The length of time for each stage depends on the complexity of the development project. 3.1. Concept stage In successful co-development processes, the concept stage usually starts with a kick-off meeting attended by people involved from the customer and the supplier side to inform and motivate these people about the objectives of the project. In some of the successful case studies, additional activities to get the persons to know each other have been proposed. This could also be used as a basis for an informal exchange of experience or to overcome personal differences between the participants of the project (for all activities during this stage see Fig. 2). As can be derived from the case studies 1, 9 and 10, in this early stage of cooperation the definition of interfaces between customer and supplier and between different departments within each organization is very important. The interfaces between customer and supplier are typically located in the technical departments for technical aspects and in the purchasing and the sales department for commercial aspects of the cooperation. In many case study interviews, it was pointed out that a close collaboration between technical and
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Customer Facility Activities
Providing to other functional areas in customer organization for examination of the proposals
Line-of-Implementation Preparation Activities
Line-of-Order-Penetration Examination of proposal:
Support Activities
possibly joint development of possible solutions
Line-of-Internal-Interaction Backstage Activities
Line-of-visibility Onstage Activities
Kick-OffMeeting
Line-of-interaction Onstage Activities
Forming of development team
Line-of-visibility
Interface definition
Coordination of - demands for changements, - Agreeement about development costs.
Defintion of reporting structures development of possible solutions by supplier
Support Activities
Examination by customer (development personnel)
Demanding and providing of necessary information
Backstage Activities
Line-of-Internal-Interaction
Patent analysis
Patent analysis
Providing to customer
Updating activty list for next phase Milestone meeting
Proposal
Preparation drawings and / or a hand made sample
Line-of-Order-Penetration Preparation Activities
Line-of-Implementation Facility Activities
Supplier Fig. 2. Blueprint—Concept stage.
commercial people is crucial for the success of a project (see Kirchmann, 1996b for similar considerations). In important meetings between the customer and the supplier, both technical and commercial departments should take part. If the collaboration between the technical and commercial departments does not work, different instructions could be communicated to the supplier intentionally or unintentionally. An example could be the request for reduction of product price by the purchasing department and the request for additional product characteristics or development activities by the development department (case study 11 referring another customer). It was mentioned in several interviews that it is important for the success of a codevelopment project that the supplier and the customer involve additional functional areas like production, logistics, marketing or sales. If there is direct contact between the customer and the supplier, the area of responsibility and the competence for decisions of these functional areas have to be clearly defined and communicated to the partner. In several projects interfaces to pre-suppliers or to reprocessing customers or final customers are necessary if their know-how is required for the new product development. The co-development partners usually have an intensive interaction and exchange of information during this early stage of the development process. It was pointed out in several interviews, which for controlling purposes, reporting contents, structure and timing should be defined. For the coordination between the involved people, meetings are useful. Coordination meetings could be defined regularly or made dependent upon the progress of the development project. In two inter-
views, regular coordination meetings were preferred as they bring more pressure to the project, and every participant tends to finish his activities by the next meeting. In the other interviews, it was found preferable that coordination meetings be scheduled according to the progress of the project. The requirements for project documentation should be agreed between the partners. Summarizing the insights derived from successful concept stages, the following propositions can be made. Propositions (1.1). The co-development projects should be started with clearly defined objectives.The persons involved should get to know each other. Interfaces between the supplier and the customer should be implemented to include other functional areas and presuppliers as well as processing and final customers. Reporting structures, coordination meetings and requirements for project documentation should be agreed upon between the partners. It was mentioned in several interviews that it is crucial for the success of a co-development project that the supplier (and the customer in case of joint development) integrate all relevant information about the solution in the form of a proposal, after having worked out a concept for the design of the new product. This proposal, which could also be an updated statement of work, includes information about product costs, necessary development activities and estimations for tooling and other investments for the production of the developed product, and information about restrictions resulting from the solution. For
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major development projects, the development of a proposal is an important part of the project. The customer has to check whether the proposal corresponds to his expectations. If several concepts have been worked out, this is an appropriate time for the selection of one or two concepts for the detail engineering stage. If possible solutions have been worked out for innovative technical products, a patent analysis is useful to verify whether patent rights would be infringed upon. A patent analysis could be performed by the supplier or the customer (case studies 3, 4 and 8). The responsibility for the patent analysis depends on the know-how situation and the strategic importance of the technology for supplier and customer. If patent rights are infringed upon, the solution has to be modified or a license contract with the patent holder has to be signed to avoid the termination of the project. During the continuing development process, the proposal is usually defined more and more in detail. To avoid information asymmetry between the partners, an important factor mentioned in several case studies is to take care that both partners have access to the current version of the proposal, including all changes of specification, to avoid misunderstandings. For coordinated development with several suppliers this task could only be performed by the customer (see case study 3). The concept could be released by both partners at the start of the detail engineering stage. The importance of reciprocal releases for the quality of the result was pointed out in one case study (case study 9). For this next stage the activities should be defined in detail.
Propositions (1.2). The customer has to check whether the proposal corresponds with his expectations. A patent analysis is necessary for innovative technical products. 3.2. Detail engineering stage During the detail engineering stage, a lot of single activities are performed (for details see Figs. 3 and 4). Depending on the form of cooperation, the activities are performed by the supplier (contract development) or by supplier and customer (joint and coordinated development). This requires a permanent coordination of activities, especially for joint and coordinated development; that was pointed out as crucial for the success of co-development projects in several interviews. For coordinate development, the results from other suppliers and from the customer have to be taken into account and communicated to the other affected suppliers for the following activities. Calculations of product costs are essential to indicate deviations from target price. During the detail engineering stage, several changes and additional requirements are possible which could affect the product and/or the development costs. For the target price, critical limits could be defined. If the critical value is exceeded, the customer has to be informed, and the situation has to be evaluated. In one case study, product calculations were only made at the end of development process, resulting in excessive product costs. The supplier stopped and re-worked the project. This led to massive delays in the product launch.
Customer Facility Activities
Line-of-Implementation Preparation Activities
Line-of-Order-Penetration Analytical methods: - FMEA - Checklists - Product Audits
Support Activities
Line-of-Internal-Interaction
Realization of development activities
Backstage Activities
Line-of-visibility
Tests: - Technical characteristics - pressure tests - other product tests
Including of final or reprocessing customers into product development
Updating of development results
Onstage Activities
Permanent coordination
Line-of-interaction Onstage Activities
Information about deviation from target price
Line-of-visibility Backstage Activities
Line-of-Internal-Interaction
Realization of development activities
Support Activities
current calculations of product costs by supplier
Updating of development results
Intermediate result of detail engineering possibly with participation of supplier or execution by supplier
Line-of-Order-Penetration Preparation Activities
Line-of-Implementation Facility Activities
Supplier Fig. 3. Blueprint I—Detail engineering stage.
possibly with participation of supplier or execution by supplier
Including presuppliers into product development
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Customer Facility Activities
Line-of-Implementation Preparation Activities
Line-of-Order-Penetration Support Activities
Line-of-Internal-Interaction
Check/Test of prototype
Decision about release of investment costs
Release or another Update
Backstage Activities
Line-of-visibility Onstage Activities
Contract about tools / investments
Line-of-interaction Onstage Activities
Updating activity list for next phase
Milestone: - Finalizing detail engineering stage - Decision about continuing or determination - Start of process engineering stage and product introduction
Line-of-visibility Backstage Activities
Line-of-Internal-Interaction
Building a prototype
Support Activities
Concept planning of production process
Detailed offer about investments / tools to customer Purchasing / Production of tools / machinery
Line-of-Order-Penetration Preparation Activities
Line-of-Implementation Facility Activities
Supplier Fig. 4. Blueprint II—Detail engineering stage.
Propositions (2.1). The activities have to be communicated and coordinated between customer and supplier. Product calculations are necessary to indicate deviations from target price. For new products, failures should be recognized as soon as possible. According to several interviews this could be done with analytical methods like FMEA (failure modes and effects analysis), checklists, or product audits (Davidson & Labib, 2003; Radnor & Noke, 2002; Specht et al., 2002, pp. 172 –174, p. 185; Teoh & Case, 2004). In some interviews, checklists and product audits were preferred to FMEA, especially for smaller products and products with a lower degree of innovation, because FMEA is very complex. All these methods could help to identify weaknesses or potential risks of the products. Integrating suppliers into the usage of these methods was also registered positively (case study 9 is a good example). This has the advantage that risks caused by the product structure or the production process could better be brought into the evaluation. Suppliers usually have broad experience with comparable products that could be transferred to the new product. In addition to suppliers, processing or final customers and presuppliers could also be involved in the evaluation process to use the experience of these groups. The importance of this step was mentioned in case study 8 because of a negative experience. On top of analytical methods, tests are also used for the identification of failures. Tests usually refer to the technical characteristics of the product and its components, or they are used to check the functions of a product. In the case studies, tests have been performed by the customer or the supplier. The
allocation to customer or supplier was decided upon by the technical possibilities of the partner or because of time restrictions. In one interview a responsible manager preferred tests done by the customer, because he does not want to rely only upon supplier information. In some cases the tests were performed by the customer and the supplier to reduce the risk of measurement error by double testing or for the calibration of the test system. Other tests performed together by customer and supplier enable discussion about the results and possibilities to avoid product failures (especially case studies 10 and 11). For coordinated development tests are used to check the whole product. These tests can only be performed by the customer, because he coordinates the development process for all involved suppliers. Tests are often used as an indicator for an external product certification. For some tests and for static calculations, external laboratories are used. External sources are used because the test results of external organizations are expected to be independent and neutral. In some cases legal norms are obligatory; in other cases necessary test equipment was only available at external laboratories. Tests are usually based on a test concept for a new product. Tests are performed in reference to relevant technical norms. Information about tests was given in all interviews because of the importance of technical characteristics of the products. For the release of detail product development, prototypes had been prepared in several case studies. It was pointed out in several interviews that prototypes could be used for an evaluation by the customer whether the product is in accordance with the specifications and with his expectations.
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Prototypes are the best instrument for the visualization of the new product and its components. They can also be used for a product demonstration to non-technical persons involved into the development project. Analytical methods, tests and evaluations of prototypes could indicate failures, potential problems and deviations from specifications. The selection of a test method is based on the balance between the risk of failure and the cost of measurement. It was mentioned in several interviews that, within customer and supplier organizations, other functional areas like a test center and quality management are often involved in the tests and the application of analytical methods. It was often mentioned that it is important to involve people into the assessment who have an independent view and who are not directly involved into the development project. If failures and deviations are indicated, a re-work of the product is necessary. This could lead to an iterative process until a satisfactory result is achieved. Re-work could result in time delays. Further problems are possible if the customer has not defined all product characteristics or if additional requirements during the detail engineering stage cause major re-work for the supplier (case studies 3 and 8). If the supplier is obliged to further projects with other customers, this situation could result in additional time delays because even small suppliers have only limited resources in product development. According to the information given in the interviews, deadlines are usually controlled on the basis of the agreed activity and a milestone list. To avoid misunderstandings between the partners, it was emphasized in some interviews
that specific results with specific deadlines need to be clearly defined by the partners (e.g. case studies 6, 7 and 9). Controlling instruments should therefore cover both time and results. Propositions (2.2). Analytical methods, tests and evaluations of a prototype should be used to indicate failures, potential problems and deviations from specifications. Controlling of time schedule is necessary to keep a project in the planned development time. 3.3. Process engineering stage and product introduction Process engineering and product introduction is the final stage of the product development cycle (see Figs. 5 and 6). During this stage other functional areas like logistics, production, sales and marketing are involved into the process (case studies 1 and 9). Customer sales and marketing managers could test the acceptance of the product in the market. Supplier and customer have to define and settle the production and logistic processes. This includes the transport and packaging of the product. For the distribution of the products to the final customers, storage and transport facilities need to be provided. The production and logistical processes need to be evaluated with an analytical method to avoid mistakes (case study 9). The input from the supplier is useful if information to critical parameters or potential failures can be provided. In one interview, it was proposed that the customer could support the supplier during the introduction of a production process (case study 1).
Customer Facility Activities
Preparation of logistical and production processes (customer)
Line-of-Implementation Preparation Activities
Line-of-Order-Penetration Support Activities
Line-of-Internal-Interaction
Involving of additional functional area (Logistics, Production, Sales, Marketing)
Sales / Marketing: Test market - Presentation of product to potential customers or introduction to separated test market. Production / Logistics: Detailed planning of production and logistical
Preparation for checks of incoming goods
Definition of requirement for supplier
Product documentation
Backstage Activities
Line-of-visibility Onstage Activities
ProcessFMEA
Coordination about production and logistical processes
Line-of-interaction Onstage Activities
Line-of-visibility Backstage Activities
Line-of-Internal-Interaction Support Activities
Line-of-Order-Penetration
Involving of additional functional areas
Preparation Activities
Determination of production and logistical possiblities for process design
Preparation of production processs
Settlement of requirements for logistics and packaging
Line-of-Implementation Facility Activities
Supplier Fig. 5. Blueprint I—Process engineering stage/Product introduction.
Preparations for process control
Providing documents for product documentation
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Customer Facility Activities
Line-of-Implementation Preparation Activities
Line-of-Order-Penetration Support Activities
Line-of-Internal-Interaction
Check of first sampl. examination
External product certification
Concept for product introduction Preparation into the market of sales documents
Product presentation to sales force
Marketing / Sales of product Storage of goods
Check of incoming goods
Backstage Activities
Line-of-visibility
Sales support: - Training, - Installations, - Customer service, - Complaint management, - Spare part delivery
Onstage Activities
Line-of-interaction possibly implementation by supplier
Onstage Activities
Line-of-visibility
Coordination of support concept for market introduction
sometimes support by supplier is helpful
Review of development process
Delivery of first goods
Sometimes support by supplier is helpful
Backstage Activities
End
Line-of-Internal-Interaction Support Activities
First sampling
First production of product
Line-of-Order-Penetration Preparation Activities
Line-of-Implementation Facility Activities
Supplier Fig. 6. Blueprint II—Process engineering stage/Product introduction.
Based on the results of the detailed engineering stage, the production process could be planned. If the supplier wants to get the order for the production of the product in development, he prepares detailed calculations or offers about necessary investments for the preparation of the production process. The customer has to decide whether the development partner will also become the production partner. In several case studies, the product was supplier-specific, and the product could not easily be given to another supplier, because of specific supplier knowhow and specific production processes of the supplier (e.g. case studies 1, 3, 4, 10, 11). There is a trade-off between investments and product price that is dependent upon the number of products being produced. An estimation of the production amount is useful for the optimization of the production process. The supplier needs a system for controlling the production process and for checking the results of production. In successful projects the methodology of the supplier has been coordinated with the customer to avoid differences. The customer himself needs a system to check incoming goods that has to be in accordance with the measurement methods and parameters the supplier uses. This system could be used starting from the first delivery of products to the customer. Propositions (3.1). Production and logistical processes should be coordinated between the partners. Product costs and investments should be assessed before a decision is made.
The production and its result should be controlled with methods that have been coordinated between customer and supplier. For many technical goods the first sampling examination is widely used in industry (all case studies). This method is based on a preliminary check on a finished and packed product by the quality management department of the supplier with a standardized report and a second countercheck by the quality management department of the customer. In two case studies (case studies 10 and 11), the first sampling was performed in the form of a joint examination by supplier and customer. This was used to save development time and to be able to discuss the results and possible improvements in the product and process. An external certification is obligatory for many technical products or a certificate is useful to gain a better reputation in the market (case studies 1, 2, 3, 4, 9, 10, 11—for case studies 5 to 7 the necessity of external certification depends on final customer requirements). For the tests during the development process the norms and criteria of the external certification laboratories have to be used by both supplier and customer to avoid a rejection of the product. Propositions (3.2). First sampling should be used as a last check before production starts. External product certification could be prepared by using the same methods and norms as external certification laboratories.
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For complex products it is necessary that the supplier support the customer during the product introduction in order for it to be successful (e.g. case studies 1 and 3). This includes providing product documentation, training for sales people and customers or additional final customer support services and spare part delivery. Having finished the new product development project, the partners had had a lot of positive and negative experiences. To avoid problems and to use good experience in following projects with the same or other partners, a project review was proposed in some case study interviews.
Propositions (3.3). The supplier could support the customer in the introduction of the new product into the market. A project review performed by customer and supplier could be helpful to summarize good and bad experiences of a codevelopment project.
3.4. Summary of results The intention of the case studies was to identify problems of controlling the co-development process and to suggest means and procedures to overcome these problems. The interviews
Table 3 Summary of propositions Stage
Problem/question
Propositions
Referred case studies
Concept stage
What is essential for the start into the concept stage? What is helpful to improve the interaction between the persons involved into the project? What is necessary to bring the relevant information from customer to supplier and vice versa?
1.1
8
What has to be agreed upon between the partners for the coordination of co-development processes? How should the customer use the proposal prepared by the supplier or during joint development? How should it be identified whether a technical solution could be used according to patent rights? How could the proposal be used during the later stages of product development? What is important for organizing the detail engineering stage? How could deviations from product price be indicated? How could failures, potential problems and deviations from specification be indicated?
1.1
Co-development projects should be started with clear defined objectives. The persons involved should get to know each other. Interfaces between supplier and customer should be implemented including other functional areas and pre-suppliers as well as processing and final customers. Reporting structures, coordination meetings and requirements for project documentation should be agreed upon between the partners. The customer has to check whether the proposal corresponds with his expectations.
2, 4, 8
How could deviations in project time be avoided? How could the production and logistical processes of supplier and customer be made to fit each other? How could investments into the production process be evaluated? How could the specification be controlled during and after production?
2.2
A patent analysis is necessary for innovative technical products. The proposal could be defined in detail during the detail engineering stage. The activities have to be communicated and coordinated between customer and supplier. Product calculations are necessary to indicate deviations from target price. Analytical methods, tests and evaluations of a prototype should be used to indicate failures, potential problems and deviations from specifications. The time schedule needs to be controlled to keep the project in the planned stage. Production and logistical processes should be coordinated between the partners.
1, 5, 6, 7
What could be used to control the product before production starts? How could external product certification be prepared?
3.2
What could the supplier do during product introduction? What could be done so that the partners learn from co-development processes?
3.3
Product costs and investments should be assessed before a decision is made. The production and the result should be controlled with methods that have been coordinated between customer and supplier. First sample examination could be used as a last check before production starts. External product certification could be prepared by using the same methods and norms as external certification laboratories. The supplier could support the customer in new product introduction into the market. A project review performed by customer and supplier could be helpful to summarize good and bad experiences from a co-development project.
Concept stage Concept stage
Concept stage
Concept stage
Concept stage Concept stage Detail eng. stage Detail eng. stage Detail eng. stage
Detail eng. stage Process eng. stage
Process eng. stage Process eng. stage
Process eng. stage Process eng. stage
Process eng. stage Process eng. stage
1.1 1.1
1.2
1.2 1.2 2.1 2.1 2.2
3.1
3.1 3.1
3.2
3.3
1, 9, 10 2, 4, 5, 6, 7, 9, 10, 11
1, 2, 9, 10, 11
1
1, 7 9, 10, 11, 12 1, 5, 7, 9, 10, 11 3, 5, 6, 7, 8, 9, 10, 11
7, 11 1, 5, 6, 7, 9, 11
2, 4, 9
5, 6, 7,8, 9, 10, 11 2, 4, 8, 9, 10, 11
1, 10, 11 1, 10
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with the managers on different hierarchical levels revealed problems, and suggested and also partly tested solutions. Table 3 summarizes: & problems indicated during the case studies; & propositions that offer a possible solution to the problems; and & to which case study is referred with a reference to the relevant stages of development process. 4. Interpretation and discussion As the above discussion of the case studies shows, effective and efficient coordination allows for successful co-development processes. At a closer look, we see that coordination tasks differ from phase to phase and, according to the different tasks, the applied coordination instruments differ as well. Table 4 gives an overview of coordination tasks and instruments. All instruments and means of coordination are intended to lower uncertainty during different stages of the co-development process by information processing and information transfer from one party to the other. According to Langlois and Robertson, two states of uncertainty can be distinguished: structural uncertainty and parametric uncertainty (Langlois & Table 4 Stage-specific coordination tasks and coordination instruments Stage
Coordination task
Instruments/means of coordination
Concept stage
Define interfaces (personally and technically) Coordination of expectations and possibilities Shaping property rights
Meetings
Detailed engineering stage
Process engineering and product introduction
(Written) proposal Patent analysis
Coordination of activities according to goals Coordination of activities according to costs. Early warnings on cost deflections or matching costs and target price
Concurrent calculation, project monitoring
Coordination of activities according to product quality. Early warnings on product functionality/ quality deflections
Checklists Product audits FMEA Function tests Prototype
Coordination of activities according to time. Early warnings on time deflections
Activity list Milestones Project plan
Avoiding or minimizing risks during regular production
Know-how transfer by product documentation and training Estimation of lot size First sample examination
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Robertson, 1995). Structural uncertainty occurs if decisions have to be based on ‘‘judgments about future outcomes that are as yet unknowable.’’ (Langlois & Robertson, 1995, p. 18). Nevertheless, the interacting parties have a certain imagination of the structure of the problem they face or of the process to be conducted, maybe only implicitly. What they don’t have is certain knowledge about the relevant parameter and their states. The not-knowing about the parameters is called parametric uncertainty. It arises ‘‘from the possibility of a range of market imperfections including bounded rationality and opportunism’’ (Langlois & Robertson, 1995). In situations of structural uncertainty, coordination instruments are applied to reveal relevant aspects of the problems. As it cannot be known in advance which problems or aspects may be detected, coordination instruments cannot be formal or restrictive but informal and deliberate. Meetings are typically applied in these situations as the case studies show. In situations of parametric uncertainty, coordination instruments are applied in order to fill the gaps of knowledge. As people already know the structure of the problem coordination instruments are more formal and narrower in scope. Patent analysis which focuses on patent information or activity plans which concentrate on activities and dates are typical for this type of coordination instruments. According to the insights gained from the case studies codevelopment processes are more successful if the parties can transfer structural uncertainty into parametric uncertainty. This aim can be achieved by applying phase specific coordination instruments. As the state of uncertainty is dependent on the knowledge of the interacting co-developers, it can be suspected that only the application of the more specific coordination instruments does not help to overcome the knowledge gap. Rather it seems to be necessary to acquire structural knowledge in order to understand the functions of the coordination instruments. As structural knowledge can be gained from meetings, the application of the more specific coordination instruments is proposed to be accompanied by meetings. In addition, the blueprints gained from the different case studies can be used themselves to gain structural knowledge and to coordinate the parties. A second assumption refers to the type of co-development process. As shown in Table 2, the processes differ in form of cooperation, degree of innovation, know-how position of the customer and clarity of specifications. Therefore, it is assumed that there are less specific coordination instruments as degree of innovation is high, know-how position of customer and supplier is low and clarity of specifications is missing. As the case studies differ extremely and focus on specific problems arising during the co-development process a generalization is not yet possible. Besides these phase and type specific insights, three overall success factors for co-development processes can be identified: trust, constant communication and achieving clear, reliable and timely decisions between the partners. They include openness in communication and an early involvement of the partner in problems occurring during the development process. It was regarded as useful for all participants if the development process and planned activities were clearly defined and
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communicated. The contact with people from former projects was regarded as helpful during the projects, especially during the early stages of a development project. Trust is important not only to overcome structural uncertainty but also to lower the probability of opportunistic behavior occurring. Constant communication refers to structural uncertainty as well and achieving clear, reliable and timely decisions show the underlying structure of the problems which have to be solved in the co-development process. 5. Conclusion The research results have been generated by case study research. This instrument was regarded as appropriate for the objectives of the investigation. It was adequate to have interviews with those persons who were directly involved into the co-development projects. Typical examples found in several case studies were the controlling of product costs and the coordination and control of activities in time according to the schedule. Other characteristics could only be identified in single case studies. For those characteristics, it has to be assessed whether they are typical for co-development processes at all. The new development projects in the analysis did not have a common structure because they refer to different business units in a customer organization and have a different length of time and different number of people involved. Among the business units differences in new development process design exist. The procedures are always based on different products that are typical for the business units. This allows for the transfer of the results to other branches of technical industry. The codevelopment processes were initiated by a major mediumsized enterprise as the customer and several small and medium-sized enterprises as suppliers. The teams usually consisted of a few people on both sides of the customer – supplier interface. Therefore the results could be transferred to other medium-sized companies producing technical products. The propositions summarized in Table 3 and the coordination tasks and coordination instruments in Table 4 could be used as a guideline for co-development processes. In other industries, like the auto industry, or in equipment construction, the project teams are larger, and the projects are more complex. There are obviously several differences to software development or to service engineering. For this areas of application it has to be checked in detail whether certain results could be applied. The research could be continued in different ways. Case study research always leads to qualitative results. The results could not be quantified in numbers. Therefore, it would be useful to make a quantitative analysis based on the characteristics that have been recognized. Another possibility for further research is to ask management and R&D-Controlling about their perception about the problems and possible solutions to investigate the differences. Another way to proceed would be to search for economical reasons for the identified problems and results. The main problems refer to principal agent theory and measurement cost/
transaction cost theory because a lot of conflict of interest problems and strategic concealments between the supplier and the customer exist. As the discussion and interpretation of the case study findings show different coordination instruments can be implemented to overcome the principal agent problems, they can be used to transfer information from one party to another in order to scale down information asymmetry and to avoid opportunistic behavior. Therefore, the employment of these instruments can be regarded as either signaling or screening actions depending on the party demanding or applying them. On the other hand, the employment of the phase specific coordination instruments can have a trust building effect as their application shows that the parties are not intentionally hiding information. Therefore, in cooperation with the contract designs mentioned as a solution according to the principal agent theory, coordination instruments can help to lower the contractual and informational gaps in co-development processes. Additionally, measurement cost theory can be used to answer the question which instrument should be applied by whom in which phase under which circumstances. Therefore, additional analyses have to be conducted. References Baldwin, C. Y., & Clark, K. B. (1997). Managing in an age of modularity. Harvard Business Review, 75(5), 84 – 93. Birou, L. M., & Fawcett, S. E. (1994). Supplier involvement in integrated product development: A comparison of US and European practices. International Journal of Physical Distribution and Logistics Management, 24(5), 4 – 14. Bozdogan, K., Deyst, J., Hoult, D., & Lucas, M. (1998). Architectural innovation in product development through early supplier integration. R&D Management, 28(3), 163 – 173. Brockhoff, K. (1992). R&D-cooperation between firms—A perceived transaction cost perspective. Management Science, 38, 514 – 524. Brockhoff, K. (1998). Der Kunde im Innovationsprozess [the customer in the innovation process]. Hamburg’ Vandenhoeck und Ruprecht. Brown, S. L., & Eisenhardt, K. M. (1995). Product development: Past research, present findings, and future directions. Academy of Management Review, 20, 343 – 378. Bu¨rgel, H. D., Haller, C., & Binder, M. (1996). F&E-Management [R&D management]. Munich’ Vahlen. Clark, K. B. (1989). Project scope and project performance: The effect of parts strategy and supplier involvement on product development. Management Science, 35, 1247 – 1263. Clark, K. B., & Fujimoto, T. (1989). Lead time in automobile product development explaining the Japanese advantage. Journal of Engineering and Technology Management, 6, 25 – 28. Clark, K. B., & Fujimoto, T. (1991). Product development performance. Boston’ Harvard Business School Press. Cusumano, K. B., & Takeishi, A. (1991). Supplier relations and management: A survey of Japanese, Japanese-trans-plant, and US auto plants. Strategic Management Journal, 12, 563 – 588. Davidson, G. G., & Labib, A. W. (2003). Learning from failures: Design improvements using a multiple criteria decision-making process. Proceedings of the Institution of Mechanical Engineers—Part G, Journal of Aerospace Engineering, 217(4), 207 – 216. Dyer, J. H. (1997). Effective interfirm collaboration: How firms minimize transaction costs and maximize transaction value. Strategic Management Journal, 18, 535 – 556. Dyer, J. H., & Ouchi (1993). Japanese style partnerships: Giving companies a competitive edge. Sloan Management Review, 35, 51 – 63.
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Yin, R. K. (1994). Case study research: Design and methods. (2 edR). Thousand Oaks, CA’ Sage Publications. Sabine Fliess holds the Chair of Services Management, University of Hagen, Germany. Her research areas are: service management and process management.
Urban Becker is Head of Internal Auditing at Schueco International KG in Bielefeld, Germany. Currently he is a doctoral candidate at the Chair of Services Management, University of Hagen.