AMR Project
Engagement of Suppliers in Product
Development process
Shailender Singh Negi
09Bm8046
Topics covered so far
Degree of Supplier involvement in product
development
Issues in the engagement with suppliers
Risk involved in the Engagement
Whether at all the companies have been benefitted
Design of Questionnaire for
Manufactures(Automobile manufacturer)
Degree of Supplier involvement
Traditional Subcontracting
Grey box strategy(Advanced Subcontracting)
Black box Parts strategy
Traditional Subcontracting
All design work and related problem solving was done
internally.
The supplier received detailed drawings and technical
specifications to be met for a component.
Only those parts which was not considered to
critically affect other parts of the overall project.
The supplier’s action domain is therefore limited to
meet these technical specifications.
Suppliers worked on components with low interdependency
with the rest of the project.
Grey box strategy (Advanced Subcontracting)
The manufacturer, here, limited its own activities by selecting
an area of the project and delegating it entirely to the
supplier.
The supplier’s domain of action is therefore widened,
although limited to areas of potentially low influence on the
overall project.
In this type of relationship, the manufacturer tried to access a
specific knowledge domain of the supplier, without limiting
its potential outcome by a predetermined set of solutions.
Suppliers are responsible for the whole problem
solving activity for highly critical components.
Black box Parts strategy
Despite the potentially high influence on the overall
project, suppliers are given freedom to define the
solution starting from the concept design domain and
then moving to the functional parameter domain.
Components developed according to these
arrangements have been identified as “black box”
parts.
Supplier involvement—potential benefits and critical factors
Partnership relation can afford the involved parties
access to complementary skills
Economies of scale in joint research
Access to new technologies or markets
Risk sharing and access to knowledge located outside
the boundaries of the firm
Engineering capabilities in the supplier network allow
the firm to benefit from the suppliers’ know-how,
thereby, reducing the development time
Simply adopting the techniques suggested in the literature
Supplier involvement—Drawbacks and potential risks
will not necessarily reduce development time or lead to
technical success in the project.
Supplier involvement could affect product development
time negatively, especially when markets and technologies
are rapidly and unpredictably evolving.
General view that collaboration makes product development
more costly, more complicated
Joint development projects are less efficient, more time
consuming and more difficult to control and manage.
Legal issues involved in joint development.
Technological competence.
Suppliers’ co-operation with other manufacturers and
own suppliers.
Factors were identified as critical for a successful outcome
Openness and matching of expectations.
Long-term strategy for involvement.
Coupling between production and product
development
Project management.
Pro-active supplier.
SELECTION OF STRATEGY IN AUTOMOBILE
INDUSTRY
Technical complexity of the product
• R&D required
• Number of components to be sourced
• Tight specifications
Availability of the technical know how
• Technical expertise of R&D department
• Manufacturing capabilities
• Experience in design field
SELECTION OF STRATEGY IN AUTOMOBILE
INDUSTRY
Legal complexity
• Legal binding on contract
• Custom regulation in case of import of tech and
equipments
• Government policy, rules and regulations
Supply chain parameters
• Quality and quantity of component
• Lead time
• Delivery requirements
• Flexibility and adoptability
Questionnaire for
Manufactures(Automobile manufacturer)
A Questionnaire has be designed to assess the
effectiveness of supplier in product development. Each
item is based on five point Likert scale. The questions
are based on following factors.
Supplier Knowledge
Supplier Trust
Team work
Value to the customer
Questionnaire
[Link]