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Systematic Improvement of Supplier Integration within the Product Development Process
Available online at www.sciencedirect.com
ScienceDirect Procedia CIRP 57 (2016) 392 – 397
49th CIRP Conference on Manufacturing Systems (CIRP-CMS 2016)
Systematic Improvement of Supplier Integration within the Product Development Process Uwe Dombrowski, Alexander Karl* Institute for Advanced Industrial Management, Langer Kamp 19, Braunschweig, Germany * Alexander Karl, M.Sc. Tel.: +49-531-391-2713; fax: +49 531 391 8237. E-mail address: [email protected]
Abstract
Initially, companies have mainly optimized processes in production and logistics. Now, an improvement in the Product Development Process (PDP) takes place more and more. For this reason, companies use lean approaches to make their processes more effective and efficient. To reach this goal, the principles of Lean Manufacturing have been transferred to the PDP. In the current situation, many companies have recognized the numerous potentials of Product Development (PD), which can be realized in companies with the so-called ‘Lean Development’ (LD). Apart from these advantages, a major problem can be identified: On the one hand, the development process is an increasingly important core process in companies, but on the other hand, companies are decreasingly the owners of these processes. A shift in development activities takes place towards the suppliers. As a result of this shift, suppliers become a very important factor for the success of the PDP and the entire company. This current situation necessitates a systematic integration of suppliers within PD. Existing management approaches for a systematic integration of suppliers have substantial deficits. Based on this research gap, findings were generated as part of a study and a comprehensive analysis in the context of a research project. The results confirm that numerous savings can be achieved for the factors development quality, time, and costs. Business cases show, however, significant deficits in the long-term focus of supplier relationships. In order to improve this issue, the integration requires an extensive analysis of the current business organization and a restructuring of development processes. A selection of the results and findings of Supplier Management and future fields of action are presented in this publication. © 2016 Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license © 2015 The Authors. Published by Elsevier B.V. (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer-review under responsibility of Scientific committee of the 49th CIRP Conference on Manufacturing Systems (CIRP-CMS 2016). Peer-review under responsibility of the scientific committee of the 49th CIRP Conference on Manufacturing Systems Keywords: Product Development, Early Supplier Integration, Lean Development, Study
1. Introduction Continuous Improvement is an ongoing task for processes within companies. It helps companies to maintain their competitiveness by fitting existing means to new challenges. The focus on Continuous Improvement was primarily based on production and logistics. In the past, numerous improvements within these two fields have been made. As an important example, this notion is shown in the concept of Lean Manufacturing. Through this comprehensive management approach, new methods and principles were successfully identified and implemented within entrepreneurial processes. After implementing numerous optimization potentials in these fields, proven methods and principles have been
transferred to the PDP to achieve similar improvements. The resulting holistic approach is called LD. The focus on the company’s own PDP has been extended: Now, systematically integrating suppliers is the most important aspect with regard to the whole PDP. This result is based on the fact that an increasing outsourcing of chunked development activities takes place in the direction of suppliers. As a result of this fact, suppliers receive extensive tasks from their manufacturer such as the development, the design, the prototyping, and the testing. Thereby, suppliers have a much higher responsibility for the successful development of the entire product. To achieve extensive improvements, it is becoming increasingly important to include the manufacturer supplier relationships in the PD improvements.
2212-8271 © 2016 Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer-review under responsibility of the scientific committee of the 49th CIRP Conference on Manufacturing Systems doi:10.1016/j.procir.2016.11.068
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A closer coordination along the value chain necessitates higher standards of cooperation. Suppliers have to be more challenged and supported. For this purpose, it is necessary to look at the PDP and cooperation with suppliers more precisely. It is essential that suppliers and manufacturers work according to the same principles and methods. [1], [2], [3] 2. Product Development Process (PDP) Overall, the PDP can be understood as a part of the product lifecycle process. Normally, it is one of the essential core processes of the company and includes the function of research and development. [4] The process is geared to the core competencies of the company and is used for the realization of corporate objectives. In consideration of the life cycle assessment, the product life starts with the process of PD. This process includes all sub-processes that are required for a product from the idea to its Start of Production (SOP). The aim of the PDP is primarily to enable the industrial production of a product. [2], [3], [4] A necessary requirement in order to reach this goal is a “full electronic description of a virtual product.” [5] After the PDP comes the product manufacturing process, in which no further constructive component changes are made. 2.1. Parts and participants of the PDP 1
Product 2 Product Engineering 3 Planning and Design
Production Engineering
4 Production
Supplier Management A Supplier Development Supplier integration A B C
ManagementManagement of the supplier of the basesupplier base Supplier development Project and knowledge management Stage of the Product Development Process
Cross function
Figure 1: PDP with cross functions
After having previously separated the PD from other business processes, the sub-processes of PD will be briefly outlined below. Figure 1 shows the processes of PD and the associated Cross Functions. The PDP can be divided into three different parts: Product Planning: As part of the Product Planning, the identification of different product ideas takes place. This identification is normally based upon the analysis of customer needs, external factors, and trends. The aim is to use the capabilities of the company - taking into account the results of the detailed analysis - in order to generate and select product variants. [5], [6] Product Engineering and Design: The Product Engineering and Design can be considered as a structured approach for engineering, designing, and working out the selected product variants. The Product Engineering and Design stage starts with determining the requirements and defining the responsibilities to get fully elaborated product documentation. [7], [8] Production Engineering / Launch Management: At the stage of Production Engineering, the design of the production environment will be developed. The objective of this stage is the planning and realization of an economic production of
previously constructed products. The focus of this stage is no longer the product design, but the manufacturability. Here, a conversion of the final development concept of a product into manufacturing takes place. [4] The process of PD is not an isolated one, but is closely linked to many accompanying processes, whichever partly have a significant impact on the performance of PD. Some important cross sections of this process are Supplier Management, Project- and Knowledge Management. [9] 2.2. Challenges of PDPs In the introduction, some challenges of PD have already been mentioned. For a systematic problem identification, these challenges are structured and explained in more detail in the following. Altogether, four different challenges can be identified: • increasing complexity, • distribution of development work, • shortening of product life cycles, • increasing demands on product and material recycling. Increasing complexity: On the one hand, customers are demanding increasingly a higher quality of products and services in shorter delivery times. On the other hand, the willingness of customers to pay a higher price for this value decreases. The increasing complexity can be identified mainly in the following four fields: [10] • customer requirements, • technology diversity, • variety of products, • development methods. Mainly due to the technological advance, an increasing digitalization of development work can be identified. Over the past fifty years, this digitization has changed the development methods continuously through various stages of evolution. Apart from the use of Computer-Aided Design (CAD) software, continuously more and more complete virtual development methods have been established, from ComputerAided Engineering (CAE), Computer-Aided Manufacturing (CAM) to overarching and inclusive PLCM software solutions. [10] Creating variants, new technologies, and development methods, results in higher development costs. Companies are therefore forced to pass on these costs along the value chain especially towards the supplier. Existing research results assume that future competition will take place less on the market, but increasingly within the value chain. [11] In addition, an increasingly uncertain demand forecasting intensifies this challenge. A prime example of this increasing volatility can be observed in the automotive industry. [12] Distribution of development work: A special case of the increasing complexity represents the distribution of the development work. Tasks of PDPs are increasingly being relocated to development partners that do not belong to the company. For the distribution of development work, different aspects can be differentiated: • in-house local relocation (internal functional level), • corporate external outsourcing (external supplier level). In-house local relocation (internal functional level): New products are no longer exclusively initiated by the department
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of Product Engineering and Design; these products are nowadays rather the result of a close cooperation between different internal departments: for example, quality management, marketing, and sales. Resulting from this relocation, an increased task of coordination and department integration takes place. Corporate external outsourcing (external supplier level): In addition, especially the outsourcing of development activities to the supplier also leads to a higher amount of coordination amongst (external) interfaces. Although even the small pieces of the development activities were outsourced, manufacturers now pursue an increasingly closer cooperation with their suppliers that goes far beyond small tasks such as prototyping. These suppliers are called - due to their large tasks of the entire PDP - value-added suppliers and are mainly located in Western Europe, Japan, and the US. These suppliers are not less integrated due to their low labor and material costs, but due to higher quality, reliability, service, and especially through their high-quality know-how. [13] Shortening of product life cycles: Reasons for the shortening of product life cycles can be found mainly in many technical innovations, which have been researched and developed in a shorter period of time. Primarily due to higher customer demands, competitive pressure results: First, to meet as many customer requirements as possible and, secondly, to distinguish oneself from competitors by ongoing innovation and product differentiation. [12] Simultaneously, a shortening of the time frame is associated with the decrease of product life cycles in order to realize profits for the company after the payback time of the product project. This shortening results in a further intensification of the situation. Wildemann calculated for example that a shortening of the revenue phase of overall 40.3 % took place from the reference year 1995 to 2002. [10] Increasing demands on product and material recycling: PD is facing increasing environmental challenges. The challenges can be attributed to environmental problems, which can be subdivided into three areas of problem identification: developmental, socio-economic, and businessrelated causes. The development-related causes include the increase in world population and the associated economic growth. All of these three areas make great demands on PDPs. Due to these macroeconomic developments, the shortage of raw materials is an important design point; crude steel, precious metals, and crude oil are concerned in particular. This shortage, combined with a high volatility, has led to increased government intervention and the enactment of other legislation. [11] As a result of the increasing requirements for the entire PDP, additional requirements need to be taken into account. [14] 2.3. Problem identification Restructuring of development cooperation is required. At that time, only single tasks were still outsourced to suppliers. Nowadays, cooperation between the supplier and the manufacturer is already present and distributed over several levels. In the future, a full change of organizational forms towards an extensive network will take place. [16] In
summary, the following three areas can be identified as the identified trends’ direct impact on the company: Changed distribution of tasks within the supply chain: The trends lead to a change of roles, responsibilities, and risks across the enterprise and in the value chain. [10], [11] The form of cooperation between the manufacturer and its suppliers will be greatly changed in this episode. [22], [23] Increase of research and development tasks: Increasing tasks within research and development are for example reflected once more in a significant increase in the number of variants. Companies are trying to satisfy various customer requests as much as possible, thus strengthening product differentiation. As a result, the share of sales of modules and kits continues to grow, which can be clearly observed in the automotive industry today. [12] Increase in the outsourcing of research and development activities: Businesses encountering the shortening of product life cycles and increasing development tasks increased through a shift of development activities. Little by little, the PD is decreasingly carried out with a manufacturer’s own force. Increasingly, a shift of these activities in the direction of suppliers and development service providers will take place. [12] Amplified and also changing requirements for the entire PDP result from the trends. This process is confronted with a changed number, networking, and dynamics of different elements. [11] In the following, it is therefore necessary to consider the entire process of every product creation detail and derive concrete requirements for individual process steps of PD from the trends shown. One major challenge is the growing significance of manufacturer supplier collaboration. Current approaches, as they exist in LD, take into account namely the issue of partnership with suppliers, but no case deals with detailed and comprehensive integration concepts. • How can companies effectively and efficiently integrate suppliers into the PD? • What can an efficient and effective networking between the supplier and the manufacturer look like? • How should the interfaces be designed between the supplier and the manufacturer? 3. Supplier integration - state of the art The research field of supplier integration within PD represents a very young research field, even though initial studies in it already exist since the early 1980s. [15] Currently, one can observe an increasing number of contributions to this topic in the management literature, which particularly address the areas of procurement and innovation management as well as the principal theme of interfirm cooperations. [29] Out of the existent research results, the following nine research fields can be identified: [16] Success factors: Research results concerning the research field of success factors examine the influence of different constituents on the process of supplier factors. Ragatz et al. come to the conclusion that intellectual, human, and physical assets must be considered for a successful integration of suppliers. [17], [23], [29] They also provide a further subdivision and outline of these success factors, which they
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were able to determine in the framework of an empirical survey. [17] Van Echtelt et al. describe success factors similarly; they mainly focus on differences between short term and long-term success factors. [18] McGinnis et al. deal with this topic as well and look into further success factors. [19] Influencing factors and their effects: In addition to the success factors, especially the influencing factors and their effects represent a comparatively frequently addressed research field. Ragatz et al. derive that not only the efficient linkage between the manufacturer and supplier organization, but also both a joint technology exchange and the integration of suppliers into the development team have a significantly positive influence on the realization of development periods and quality [33]. LaBahn et al. and others, who deal with this matter, come up with further insights. [20], [21], [22] Arnold provides a summary of various influencing factors. [38] Point in time: Particularly Handfield et al. perceive the timing of supplier integration as a central research subject. [23] They come up with first results as to when exactly suppliers should be integrated into the PDP in order to guarantee an adequate integration. Moreover, the point in time is taken into account in further studies, where generally the complexity, the scope of delivery, the risk of products and technologies, and the strategic alignment of the manufacturer with respect to both the development and the suppliers are recognized as criteria for suppliers’ different points in time. Besides from these findings, however, no concrete recommendations for the timing of integration can be given. [20], [22], [23], [24] Intensity: This area is concerned with the extent of supplier manufacturer relationships and is very closely linked to the timing of integration at the same time. The existing results of Mikkola et al. were considered merely within a singular case study and thus prevent the generalization of these findings. [24] LaBahn et al. ascribe the intensity of the manufacturer supplier relationship primarily to the manufacturers’ willingness to innovate. [20] Dröge et al. identify a close relationship between the intensity of supplier cooperation and the overall PD time. [25] Regional differences: In 1989, Clark already emphasizes regional differences that exist in supplier manufacturer relationships. In particular, he focuses on Japanese car manufacturers and compares them with European and American OEM. [26], [27] Significant regional differences regarding the configuration of supplier manufacturer relationships are detected here. While American companies focus mostly on short-term and on costs-oriented relationships with suppliers, the longer-term relationships based on partnership can be increasingly found on the Japanese markets. These findings were subsequently amplified by very similar results in numerous other studies. [21], [27], [28] Organizational arrangement: The organizational arrangement is a so far hardly covered research field. Only in Petersen et al. and others, concrete indications for the organizational arrangement of supplier integration in the context of Supplier Management can be found. Wagner et al. deal with both criteria of supplier selection, the timing and the exact scope, and the constitution of a project team. [22], [23]
[29] Wynstra et al. point out concrete guidelines and recommended courses of action, which should provide for an organizational arrangement of supplier integration; they distinguish strategic from operational levels. [18], [30] Procurement function: This function plays a fundamental role for the supplier integration. Melender et al. point out a discrepancy between the important task of procurement and the only slight influence on the process of technology selection. [50] In his study, Wagner supports this thesis with further findings and particularly assigns the procurement an important role in the PDP. Wagner emphasizes that procurement is very often neglected in the PDP. [31] Risks: In addition to the numerous studies on the success factors, Hartley’s study shows that the integration of suppliers does not necessarily have a positive impact on the performance of development. [32] In a relatively recent publication, John explores the risks resulting from an intensive manufacturer supplier relationship, which he classifies into behavioral risks, performance risks, and risks from management and organization, in order to come up with a clear presentation of the research results in this way. [16] Cooperation and network research: This field is a very broad research field that permits only severely restricted valid statements for the supplier integration. For this reason, this level shall not be considered further in the context of this paper. However, a literature review of existing research results on this topic can be found in Zent et al. [33] In summary, different research results already exist, which enable a gain in expertise. These results focus either primarily on the potentials, risks, and success factors of supplier integration, or on singular process components of Supplier Management. Concerning the examination of topics of research and development in the context of a holistic corporate analysis, substantial deficits still exist. [33] Referring to the supplier integration in all examined approaches and investigations, the concept of LD is negligible. To this end, the following statements can be made: •
•
•
Many manufacturers are already working according to methods and concepts of LD. Referring to this approach, the manufacturers could have already saved on numerous improvements in terms of cost, quality, and time. Numerous suppliers do not operate according to the principles and methods of their manufacturer. Their PDPs are not coordinated with the manufacturer processes. Moreover, the concept of LD includes numerous approaches that enable a more efficient and effective integration of suppliers.
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4. Systematic improvement of supplier integration In the previous chapter, academic voids were already identified based on an intensive analysis of the literature. Consequently, there are no holistic and structured approaches to help organizations in the context of PD to improve the systematical integration of suppliers. Figure 2 schematically shows a way to improve supplier integration. Its steps are described in more detail below. 1Step 1: Analysis Analysis
2
3
Identification
Improvement Interface reduction
Fields of identification within the Product Development Process:
Development Process 1
2
Product Planning
3
Product Engineering & Design
Production Engineering
E.g. combine tasks, use system suppliers, eiminate inactive suppliers
4
Maturity rating Based on 11 criteria 1,00 1 11
Production Engineering
4 Production
B C
Supplier Management
Management Management of the supplier of the base Supplier Base
2,00
3
Supplier Development Projekt- and Knowledgemanagement Stage of the Product Development Process
Cross Function
Supplier Management A Supplier Development Supplier Integration A B
C
Management Management of the supplier of the base Supplier Base
Supplier Development
Two different levels for a combined analysis
• • •
Supplier integration Supplier development Management of the supplier base
Systematic integration E.g. resident engineers, early supplier integration, target costing, linking pins Supplier coordination E.g. information and communication management simultaneous engineering, cross cooperation
Fields of identification
Relevant questions
Management of supplier base
How should the operative supplier selection and cooperation with the suppliers be implemented?
Supplier integration
How and when should the procedural and temporal integration of suppliers take place?
Supplier development
How will existing suppliers be promoted and new suppliers be developed?
2
3,00
Product 2 Product Engineering 3 Planning & Design
Supplier Management A Supplier Development Supplier Integration A
Table 1: Different fields of identification
Verification
10
1
supplier is inevitable. Important is the holistic identification that goes beyond individual areas. The following table lists the three major fields of view for an overall identification.
4,00
4
9
5
8
7
6
E. g. partnership, information exchange, targets, controlling, improvements, conflict resolution support, standardization
Figure 2: Systematic improvement of supplier integration in PDP
Step 1: Analysis The first step is based on a three-part analysis, which breaks down as follows: • analysis of manufacturer processes, • supplier manufacturer interface analysis, • analysis of supplier processes. The steps of the three-part analysis are structured chronologically. This means that for the precise analysis of manufacturer supplier interfaces, an analysis of the processes of the manufacturer should first be carried out. The manufacturer is thus the driving force, whose circumstances influence the design of the subsequent processes. The aim of the first step is an explanatory view of the current situation. It provides the basis for the success of subsequent steps. An important point of the combined analysis is the valuation of performance and capability. For this purpose, two different levels must be merged: • PDP, • Supplier Management. The simultaneous consideration of both levels results in a change in the perspective objectives. The PDP focuses mainly on capabilities such as fast and responsive processes, high development productivity, and products with distinction and integrity. [38] In classical Supplier Management, suppliers are mainly used to reduce costs and to cover additional capacity. The integration of suppliers in the PDP not only enables an improvement of development time, cost, and product and process quality, but also brings about more advantages. Such advantages include an improvement in the reliability and durability of the parts, a better use of resources, and the use of additional development expertise, i.e. new know-how. Step 2: Identification The second step is based on the information and data from the actual analysis. The aim of this second step is the identification of improvements in manufacturer supplier collaboration. Even the identification of improvements and design approaches can be carried out on different levels. No matter what the level is, the reduction of waste should be the key aspect to consider. To integrate suppliers systematically, a profound analysis of interfaces between the manufacturer and
A recent German study shows that companies often have wrong targets pertaining to the integration of suppliers, namely to realize cost advantages or to incorporate missing know-how. Many manufacturers have not considered especially supplier development, although it should be an important field of action. It comprises the preselection, audit, assessment, and controlling of suppliers. Step 3: Improvement Management concepts in PD with their methods and principles have a significant impact on the supply chain management. Existing research results show e.g. that especially the LD principles frontloading, Kaizen, and standardized procedures for supplier evaluation have a high impact on Supplier Management. According to a German study, an early involvement of the purchasing department and the set-based concurrent engineering changed the cooperation with suppliers in particular. It requires a high-level relationship with the supplier, which is impossible to attain without a large degree of mutual trust and knowledge exchange. Accordingly, suppliers must choose the best decision for the customer without considering only the cost benefits. [1], [3] Regardless of the respective management concepts, three prominent fields of action can be identified: interface reduction, supplier integration, and supplier coordination. Interface reduction: The growing complexity of PDPs was already mentioned. With the reduction of interfaces between the manufacturer and supplier or between different departments in one organization, a significant amount of complexity reduction can be reached. The goal of the interface design is to achieve an optimal calibration of the necessary interfaces. Measures to reduce the complexity are e.g. to combine tasks, use system suppliers, use supplier prioritization lists, eliminate inactive suppliers, and strive for long-term partnerships. Supplier integration: In production and logistics, comprehensive concepts such as just-in-time for the systematic integration of suppliers in the selected processes already exist. In PD, this concept is to date only very slightly applied. The combination of internal and external functions and processes is vital; a spatial, temporal, and functional integration promises to be the most successful. This integration can be accomplished not only with humanoriented approaches like resident engineering or Likert’s linking pin model, but also with concepts regarding the process and costs such as the method of target costing.
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Supplier coordination: Suppliers and departments of the manufacturer obviously need to be coordinated in a meaningful way. In this regard, purchasing is very important in terms of the inclusion of various departments in the selection and collaboration with suppliers. In fact, it is even more important than PD itself. Examples for areas of supplier coordination include simultaneous engineering, interdepartmental cooperation, knowledge management, and information and communication management. Step 4: Verification As always, it is crucial - and difficult at the same time - to validate the previously mentioned points. One approach to do so is to look at the degree of maturity, which is based on eleven criteria identified by Dombrowski et al. [1] The criteria that need to be evaluated are cooperative partnership, intensive exchange of information, long-term cooperation, firm objectives, regular controlling, continual improvement, cooperative solving of conflicts, support and participation, interdepartmental collaboration, anticipatory and preventive action, and high standardization. However, research shows that different departments have different levels of maturity. Hence, the subsequent comparison must be handled with care. 5. Summary and further research needs Companies have recognized the relevance of supplier integration within the PDP. Studies also confirm this observation. With the illustrated process model, a systematic approach to improve supplier integration is possible. This approach is universally valid and therefore requires an exact specification. Existing research results provide a good basis for the adaptation to the individual case and the required detailing. The topic of interfaces has already been touched upon during the interface reduction. However, the design of these interfaces will be of special importance in the future. This significance is underlined by a qualitative study, which has been conducted as part of an ongoing research project. Specialists from ten German companies therefore primarily see the identification and standardization of such interfaces to be particularly relevant. Although the process model constitutes a good basis in combination with the current literature research, further investigation is therefore necessary. References [1] [2]
[3] [4] [5] [6]
[7] [8]
Dombrowski, U., Karl, A., 2016. Lieferantenintegration im Produktentstehungsprozess: Ergebnisse einer deutschen Studie. ShakerVerlag, Aachen. Dombrowski, U., Karl, A., Schmidtchen, K., 2015. Erfolgsfaktor Lieferantenintegration, in: Dombrowski, U. (Ed.), Lean Development. Aktueller Stand und zukünftige Entwicklungen, 2015, 1. ed. , Springer Berlin, pp. 209-222. Dombrowski, U., Schmidtchen, K., Krenkel, P., 2014. Impact of Lean Development System Implementation on the Prodct Development Process, p. 5 VDI 2870, 2010. Ganzheitliche Produktionssysteme (2010). Verein Deutscher Ingenieure, Düsseldorf. Accessed 7 January 2015, 111 pp. VDI 2220, 1980. Produktplanung: Ablauf, Begriffe und Organisation. Verein Deutscher Ingenieure (VDI), Düsseldorf. Accessed 7 January 2015, 17 pp. Braess, H.-H., Ehlers, C., Hackenberg, U., Widmann, U., 2013. Produktentstehungsprozess, in: Braess, H.-H., Seiffert, U. (Eds.), ViewegHandbuch Kraftfahrzeugtechnik. 7. ed. Springer Vieweg-Verlag, Wiesbaden, pp. 1133-1219. VDI 2221, 1993. Methodik zum Entwickeln und Konstruieren technischer Systeme und Produkte. Verein Deutscher Ingenieure (VDI), Düsseldorf. Accessed 7 January 2015, p. 44. Westkämper, E., 2006. Einführung in die Organisation der Produktion, 1. ed. Springer-Verlag, Berlin, p. 250.
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Feldhusen, J., Grote, K.-H., 2013. Der Produktentstehungsprozess (PEP), in: Feldhusen, J., Grote, K.-H. (Eds.), Pahl/Beitz Konstruktionslehre. Methoden und Anwendung erfolgreicher Produktentwicklung, 8. ed. Springer-Verlag, Berlin, pp. 11-24. Wildemann, H., 2013. Advanced Purchasing: Leitfaden zur Einbindung der Beschaffungsmärkte in den Produktentstehungsprozess, 13. ed. TCW, Transfer-Centrum-Verlag, München, p. 37, 359 Sanz, Francisco J. Gracia, 2007. Ganzheitliche Beschaffungsstrategie als Gestaltungsrahmen der globalen Netzwerkintegration in der Automobilindustrie, in: Sanz, Francisco J. Gracia, Semmler, K., Walther, J. (Eds.), Die Automobilindustrie auf dem Weg zur globalen Netzwerkkompetenz. Effiziente und flexible supply chains erfolgreich gestalten. Springer-Verlag, Berlin, pp. 3-24. Berking, J., Borrek, M.-A., et al.:. FAST 2025: Future Automotive Industry Structure. Eine Studie von Oliver Wyman, 1. ed. Verband der Automobilindustrie (VDA), Berlin, pp. 42-46. Hofbauer, G., Mashhour, T., Fischer, M., 2012. Lieferantenmanagement: Die wertorientierte Gestaltung der Lieferbeziehung, 2. ed. Oldenbourg Wissenschaftsverlag, München, p. 139 Herrmann, C., 2010. Ganzheitliches Life Cycle Management: Nachhaltigkeit und Lebenszyklusorientierung in Unternehmen. Springer-Verlag, Berlin, Online-Ressource. Imai, K., Nonaka, I., Takeuchi, H., 1985. Managing the new NPD process: how Japanese companies leran and unlearn, in: Clark, K.B., Hayes, R.H., Lorenz, C. (Eds.), The Uneasy alliance. Managing the productivitytechnology dilemma. Harvard Business School-Press, Boston, pp. 337-381. John, S., 2010. Integration von Lieferanten in die Produktentwicklung: Risiken und Risikomanagement in vertikalen Entwicklungskooperationen; eine konzeptionelle und empirische Untersuchung, 1. ed. Dr. Hut-Verlag, München, 326, XCIV S. Ragatz, G.L., Handfield, R.B., Scannell, T.V., 1997. Success Factors for Integrating Suppliers into New Product Development. Journal of Product Innovation Management 14 (3), 190-202. Echtelt, Ferrie E. A. van, Wynstra, F., Weele, Arjan J. van, Duysters, G., 2008. Managing Supplier Involvement in New Product Development: A Multiple-Case Study. Journal of Product Innovation Management (25), 180201. McGinnis, M.A., Vallopra, R.M., 1999. Purchasing and Supplier Involvement in Process Improvement: A Source of Competitive Advantage. The Journal of Supply Chain Management 35 (3), 42-50. LaBahn, D.W., Krapfel, R., 2000. Early Supplier Involvment in Customer New Product Development: A Contingency Model of Component Supplier Intentions. Journal of Business Research (47), 173-190. Dyer, J.H., Chu, W., 1997. The Determinants of inter-firm trust in SupplierAutomaker Relationships in the U.S., Japan, and Korea, pp. 1-31. Wagner, S.M., Hoegl, M., 2006. Involving suppliers in product development: Insights from R&D directors and project managers. Industrial Marketing Management 35 (8), 936-943. Handfield, R.B., Ragatz, G.L., Ptersen, K.J., Monczka, R.M., 1999. Involving Suppliers in New Product Development. California Management Review 42 (1), pp. 59-82. Mikkola, J.H., SkjøttϋLarsen, T., 2006. Platform management: Implication for new product development and supply chain management. European Business Review 18 (3), pp. 214-230. Dröge, C., 2000. The ability to minimize the timing of new product development and introduction: an examination of antecedent factors in the North American automobile supplier industry. Journal of Product Innovation Management 17 (1), pp. 24-40. Clark, K.B., 1989. Project Scope and Project Performance: The Effect of Parts Strategy and Supplier Involvement on Product Development. Management Science 35 (10), pp. 1247-1263. Clark, K.B., Fujimoto, T., 1991. Product development performance: Strategy, organization and management in the world auto industry, 2. ed. Harvard Business School Press, Boston, xi, 409. Liker, J.K., Kamath, R.R., Nazli Wasti, S., Nagamachi, M., 1996. Supplier involvement in automotive component design: are there really large US Japan differences? Research Policy 25 (1), pp. 59-89. Petersen, K.J., Handfield, R.B., Ragatz, G.L., 2003. A Model of Supplier Integration into New Product Development (2003). The Journal of Product Innovation Management (20), 284-299. Wynstra, F., Echtelt, Ferrie E. A. (Eds.), 2001. Managing Supplier Integration into Product Development: A Literature Review and Conceptual Model, p. 22 Wagner, S.M., 2003. Intensity and Managerial Scope of Supplier Integration. The Journal of Supply Chain Management (Fall 2003). Hartley, J., 1997. Managing the buyer-supplier interface for on-time performance in product development. Journal of Operations Management 15 (1), 57-70. Zentes, J., Swoboda, B., Morschett, D., 2005. Koopertionen, Allianzen und Netzwerke - Entwicklung der Forschung und Kurzabriss, in: Zentes, J., Swoboda, B., Morschett, D. (Eds.), Kooperationen, Allianzen und Netzwerke. Grundlagen - Ansätze - Perspektiven, 2. ed. Gabler-Verlag, Wiesbaden.
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49th CIRP Conference on Manufacturing Systems (CIRP-CMS 2016)
Systematic Improvement of Supplier Integration within the Product Development Process Uwe Dombrowski, Alexander Karl* Institute for Advanced Industrial Management, Langer Kamp 19, Braunschweig, Germany * Alexander Karl, M.Sc. Tel.: +49-531-391-2713; fax: +49 531 391 8237. E-mail address: [email protected]
Abstract
Initially, companies have mainly optimized processes in production and logistics. Now, an improvement in the Product Development Process (PDP) takes place more and more. For this reason, companies use lean approaches to make their processes more effective and efficient. To reach this goal, the principles of Lean Manufacturing have been transferred to the PDP. In the current situation, many companies have recognized the numerous potentials of Product Development (PD), which can be realized in companies with the so-called ‘Lean Development’ (LD). Apart from these advantages, a major problem can be identified: On the one hand, the development process is an increasingly important core process in companies, but on the other hand, companies are decreasingly the owners of these processes. A shift in development activities takes place towards the suppliers. As a result of this shift, suppliers become a very important factor for the success of the PDP and the entire company. This current situation necessitates a systematic integration of suppliers within PD. Existing management approaches for a systematic integration of suppliers have substantial deficits. Based on this research gap, findings were generated as part of a study and a comprehensive analysis in the context of a research project. The results confirm that numerous savings can be achieved for the factors development quality, time, and costs. Business cases show, however, significant deficits in the long-term focus of supplier relationships. In order to improve this issue, the integration requires an extensive analysis of the current business organization and a restructuring of development processes. A selection of the results and findings of Supplier Management and future fields of action are presented in this publication. © 2016 Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license © 2015 The Authors. Published by Elsevier B.V. (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer-review under responsibility of Scientific committee of the 49th CIRP Conference on Manufacturing Systems (CIRP-CMS 2016). Peer-review under responsibility of the scientific committee of the 49th CIRP Conference on Manufacturing Systems Keywords: Product Development, Early Supplier Integration, Lean Development, Study
1. Introduction Continuous Improvement is an ongoing task for processes within companies. It helps companies to maintain their competitiveness by fitting existing means to new challenges. The focus on Continuous Improvement was primarily based on production and logistics. In the past, numerous improvements within these two fields have been made. As an important example, this notion is shown in the concept of Lean Manufacturing. Through this comprehensive management approach, new methods and principles were successfully identified and implemented within entrepreneurial processes. After implementing numerous optimization potentials in these fields, proven methods and principles have been
transferred to the PDP to achieve similar improvements. The resulting holistic approach is called LD. The focus on the company’s own PDP has been extended: Now, systematically integrating suppliers is the most important aspect with regard to the whole PDP. This result is based on the fact that an increasing outsourcing of chunked development activities takes place in the direction of suppliers. As a result of this fact, suppliers receive extensive tasks from their manufacturer such as the development, the design, the prototyping, and the testing. Thereby, suppliers have a much higher responsibility for the successful development of the entire product. To achieve extensive improvements, it is becoming increasingly important to include the manufacturer supplier relationships in the PD improvements.
2212-8271 © 2016 Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer-review under responsibility of the scientific committee of the 49th CIRP Conference on Manufacturing Systems doi:10.1016/j.procir.2016.11.068
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A closer coordination along the value chain necessitates higher standards of cooperation. Suppliers have to be more challenged and supported. For this purpose, it is necessary to look at the PDP and cooperation with suppliers more precisely. It is essential that suppliers and manufacturers work according to the same principles and methods. [1], [2], [3] 2. Product Development Process (PDP) Overall, the PDP can be understood as a part of the product lifecycle process. Normally, it is one of the essential core processes of the company and includes the function of research and development. [4] The process is geared to the core competencies of the company and is used for the realization of corporate objectives. In consideration of the life cycle assessment, the product life starts with the process of PD. This process includes all sub-processes that are required for a product from the idea to its Start of Production (SOP). The aim of the PDP is primarily to enable the industrial production of a product. [2], [3], [4] A necessary requirement in order to reach this goal is a “full electronic description of a virtual product.” [5] After the PDP comes the product manufacturing process, in which no further constructive component changes are made. 2.1. Parts and participants of the PDP 1
Product 2 Product Engineering 3 Planning and Design
Production Engineering
4 Production
Supplier Management A Supplier Development Supplier integration A B C
ManagementManagement of the supplier of the basesupplier base Supplier development Project and knowledge management Stage of the Product Development Process
Cross function
Figure 1: PDP with cross functions
After having previously separated the PD from other business processes, the sub-processes of PD will be briefly outlined below. Figure 1 shows the processes of PD and the associated Cross Functions. The PDP can be divided into three different parts: Product Planning: As part of the Product Planning, the identification of different product ideas takes place. This identification is normally based upon the analysis of customer needs, external factors, and trends. The aim is to use the capabilities of the company - taking into account the results of the detailed analysis - in order to generate and select product variants. [5], [6] Product Engineering and Design: The Product Engineering and Design can be considered as a structured approach for engineering, designing, and working out the selected product variants. The Product Engineering and Design stage starts with determining the requirements and defining the responsibilities to get fully elaborated product documentation. [7], [8] Production Engineering / Launch Management: At the stage of Production Engineering, the design of the production environment will be developed. The objective of this stage is the planning and realization of an economic production of
previously constructed products. The focus of this stage is no longer the product design, but the manufacturability. Here, a conversion of the final development concept of a product into manufacturing takes place. [4] The process of PD is not an isolated one, but is closely linked to many accompanying processes, whichever partly have a significant impact on the performance of PD. Some important cross sections of this process are Supplier Management, Project- and Knowledge Management. [9] 2.2. Challenges of PDPs In the introduction, some challenges of PD have already been mentioned. For a systematic problem identification, these challenges are structured and explained in more detail in the following. Altogether, four different challenges can be identified: • increasing complexity, • distribution of development work, • shortening of product life cycles, • increasing demands on product and material recycling. Increasing complexity: On the one hand, customers are demanding increasingly a higher quality of products and services in shorter delivery times. On the other hand, the willingness of customers to pay a higher price for this value decreases. The increasing complexity can be identified mainly in the following four fields: [10] • customer requirements, • technology diversity, • variety of products, • development methods. Mainly due to the technological advance, an increasing digitalization of development work can be identified. Over the past fifty years, this digitization has changed the development methods continuously through various stages of evolution. Apart from the use of Computer-Aided Design (CAD) software, continuously more and more complete virtual development methods have been established, from ComputerAided Engineering (CAE), Computer-Aided Manufacturing (CAM) to overarching and inclusive PLCM software solutions. [10] Creating variants, new technologies, and development methods, results in higher development costs. Companies are therefore forced to pass on these costs along the value chain especially towards the supplier. Existing research results assume that future competition will take place less on the market, but increasingly within the value chain. [11] In addition, an increasingly uncertain demand forecasting intensifies this challenge. A prime example of this increasing volatility can be observed in the automotive industry. [12] Distribution of development work: A special case of the increasing complexity represents the distribution of the development work. Tasks of PDPs are increasingly being relocated to development partners that do not belong to the company. For the distribution of development work, different aspects can be differentiated: • in-house local relocation (internal functional level), • corporate external outsourcing (external supplier level). In-house local relocation (internal functional level): New products are no longer exclusively initiated by the department
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of Product Engineering and Design; these products are nowadays rather the result of a close cooperation between different internal departments: for example, quality management, marketing, and sales. Resulting from this relocation, an increased task of coordination and department integration takes place. Corporate external outsourcing (external supplier level): In addition, especially the outsourcing of development activities to the supplier also leads to a higher amount of coordination amongst (external) interfaces. Although even the small pieces of the development activities were outsourced, manufacturers now pursue an increasingly closer cooperation with their suppliers that goes far beyond small tasks such as prototyping. These suppliers are called - due to their large tasks of the entire PDP - value-added suppliers and are mainly located in Western Europe, Japan, and the US. These suppliers are not less integrated due to their low labor and material costs, but due to higher quality, reliability, service, and especially through their high-quality know-how. [13] Shortening of product life cycles: Reasons for the shortening of product life cycles can be found mainly in many technical innovations, which have been researched and developed in a shorter period of time. Primarily due to higher customer demands, competitive pressure results: First, to meet as many customer requirements as possible and, secondly, to distinguish oneself from competitors by ongoing innovation and product differentiation. [12] Simultaneously, a shortening of the time frame is associated with the decrease of product life cycles in order to realize profits for the company after the payback time of the product project. This shortening results in a further intensification of the situation. Wildemann calculated for example that a shortening of the revenue phase of overall 40.3 % took place from the reference year 1995 to 2002. [10] Increasing demands on product and material recycling: PD is facing increasing environmental challenges. The challenges can be attributed to environmental problems, which can be subdivided into three areas of problem identification: developmental, socio-economic, and businessrelated causes. The development-related causes include the increase in world population and the associated economic growth. All of these three areas make great demands on PDPs. Due to these macroeconomic developments, the shortage of raw materials is an important design point; crude steel, precious metals, and crude oil are concerned in particular. This shortage, combined with a high volatility, has led to increased government intervention and the enactment of other legislation. [11] As a result of the increasing requirements for the entire PDP, additional requirements need to be taken into account. [14] 2.3. Problem identification Restructuring of development cooperation is required. At that time, only single tasks were still outsourced to suppliers. Nowadays, cooperation between the supplier and the manufacturer is already present and distributed over several levels. In the future, a full change of organizational forms towards an extensive network will take place. [16] In
summary, the following three areas can be identified as the identified trends’ direct impact on the company: Changed distribution of tasks within the supply chain: The trends lead to a change of roles, responsibilities, and risks across the enterprise and in the value chain. [10], [11] The form of cooperation between the manufacturer and its suppliers will be greatly changed in this episode. [22], [23] Increase of research and development tasks: Increasing tasks within research and development are for example reflected once more in a significant increase in the number of variants. Companies are trying to satisfy various customer requests as much as possible, thus strengthening product differentiation. As a result, the share of sales of modules and kits continues to grow, which can be clearly observed in the automotive industry today. [12] Increase in the outsourcing of research and development activities: Businesses encountering the shortening of product life cycles and increasing development tasks increased through a shift of development activities. Little by little, the PD is decreasingly carried out with a manufacturer’s own force. Increasingly, a shift of these activities in the direction of suppliers and development service providers will take place. [12] Amplified and also changing requirements for the entire PDP result from the trends. This process is confronted with a changed number, networking, and dynamics of different elements. [11] In the following, it is therefore necessary to consider the entire process of every product creation detail and derive concrete requirements for individual process steps of PD from the trends shown. One major challenge is the growing significance of manufacturer supplier collaboration. Current approaches, as they exist in LD, take into account namely the issue of partnership with suppliers, but no case deals with detailed and comprehensive integration concepts. • How can companies effectively and efficiently integrate suppliers into the PD? • What can an efficient and effective networking between the supplier and the manufacturer look like? • How should the interfaces be designed between the supplier and the manufacturer? 3. Supplier integration - state of the art The research field of supplier integration within PD represents a very young research field, even though initial studies in it already exist since the early 1980s. [15] Currently, one can observe an increasing number of contributions to this topic in the management literature, which particularly address the areas of procurement and innovation management as well as the principal theme of interfirm cooperations. [29] Out of the existent research results, the following nine research fields can be identified: [16] Success factors: Research results concerning the research field of success factors examine the influence of different constituents on the process of supplier factors. Ragatz et al. come to the conclusion that intellectual, human, and physical assets must be considered for a successful integration of suppliers. [17], [23], [29] They also provide a further subdivision and outline of these success factors, which they
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were able to determine in the framework of an empirical survey. [17] Van Echtelt et al. describe success factors similarly; they mainly focus on differences between short term and long-term success factors. [18] McGinnis et al. deal with this topic as well and look into further success factors. [19] Influencing factors and their effects: In addition to the success factors, especially the influencing factors and their effects represent a comparatively frequently addressed research field. Ragatz et al. derive that not only the efficient linkage between the manufacturer and supplier organization, but also both a joint technology exchange and the integration of suppliers into the development team have a significantly positive influence on the realization of development periods and quality [33]. LaBahn et al. and others, who deal with this matter, come up with further insights. [20], [21], [22] Arnold provides a summary of various influencing factors. [38] Point in time: Particularly Handfield et al. perceive the timing of supplier integration as a central research subject. [23] They come up with first results as to when exactly suppliers should be integrated into the PDP in order to guarantee an adequate integration. Moreover, the point in time is taken into account in further studies, where generally the complexity, the scope of delivery, the risk of products and technologies, and the strategic alignment of the manufacturer with respect to both the development and the suppliers are recognized as criteria for suppliers’ different points in time. Besides from these findings, however, no concrete recommendations for the timing of integration can be given. [20], [22], [23], [24] Intensity: This area is concerned with the extent of supplier manufacturer relationships and is very closely linked to the timing of integration at the same time. The existing results of Mikkola et al. were considered merely within a singular case study and thus prevent the generalization of these findings. [24] LaBahn et al. ascribe the intensity of the manufacturer supplier relationship primarily to the manufacturers’ willingness to innovate. [20] Dröge et al. identify a close relationship between the intensity of supplier cooperation and the overall PD time. [25] Regional differences: In 1989, Clark already emphasizes regional differences that exist in supplier manufacturer relationships. In particular, he focuses on Japanese car manufacturers and compares them with European and American OEM. [26], [27] Significant regional differences regarding the configuration of supplier manufacturer relationships are detected here. While American companies focus mostly on short-term and on costs-oriented relationships with suppliers, the longer-term relationships based on partnership can be increasingly found on the Japanese markets. These findings were subsequently amplified by very similar results in numerous other studies. [21], [27], [28] Organizational arrangement: The organizational arrangement is a so far hardly covered research field. Only in Petersen et al. and others, concrete indications for the organizational arrangement of supplier integration in the context of Supplier Management can be found. Wagner et al. deal with both criteria of supplier selection, the timing and the exact scope, and the constitution of a project team. [22], [23]
[29] Wynstra et al. point out concrete guidelines and recommended courses of action, which should provide for an organizational arrangement of supplier integration; they distinguish strategic from operational levels. [18], [30] Procurement function: This function plays a fundamental role for the supplier integration. Melender et al. point out a discrepancy between the important task of procurement and the only slight influence on the process of technology selection. [50] In his study, Wagner supports this thesis with further findings and particularly assigns the procurement an important role in the PDP. Wagner emphasizes that procurement is very often neglected in the PDP. [31] Risks: In addition to the numerous studies on the success factors, Hartley’s study shows that the integration of suppliers does not necessarily have a positive impact on the performance of development. [32] In a relatively recent publication, John explores the risks resulting from an intensive manufacturer supplier relationship, which he classifies into behavioral risks, performance risks, and risks from management and organization, in order to come up with a clear presentation of the research results in this way. [16] Cooperation and network research: This field is a very broad research field that permits only severely restricted valid statements for the supplier integration. For this reason, this level shall not be considered further in the context of this paper. However, a literature review of existing research results on this topic can be found in Zent et al. [33] In summary, different research results already exist, which enable a gain in expertise. These results focus either primarily on the potentials, risks, and success factors of supplier integration, or on singular process components of Supplier Management. Concerning the examination of topics of research and development in the context of a holistic corporate analysis, substantial deficits still exist. [33] Referring to the supplier integration in all examined approaches and investigations, the concept of LD is negligible. To this end, the following statements can be made: •
•
•
Many manufacturers are already working according to methods and concepts of LD. Referring to this approach, the manufacturers could have already saved on numerous improvements in terms of cost, quality, and time. Numerous suppliers do not operate according to the principles and methods of their manufacturer. Their PDPs are not coordinated with the manufacturer processes. Moreover, the concept of LD includes numerous approaches that enable a more efficient and effective integration of suppliers.
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4. Systematic improvement of supplier integration In the previous chapter, academic voids were already identified based on an intensive analysis of the literature. Consequently, there are no holistic and structured approaches to help organizations in the context of PD to improve the systematical integration of suppliers. Figure 2 schematically shows a way to improve supplier integration. Its steps are described in more detail below. 1Step 1: Analysis Analysis
2
3
Identification
Improvement Interface reduction
Fields of identification within the Product Development Process:
Development Process 1
2
Product Planning
3
Product Engineering & Design
Production Engineering
E.g. combine tasks, use system suppliers, eiminate inactive suppliers
4
Maturity rating Based on 11 criteria 1,00 1 11
Production Engineering
4 Production
B C
Supplier Management
Management Management of the supplier of the base Supplier Base
2,00
3
Supplier Development Projekt- and Knowledgemanagement Stage of the Product Development Process
Cross Function
Supplier Management A Supplier Development Supplier Integration A B
C
Management Management of the supplier of the base Supplier Base
Supplier Development
Two different levels for a combined analysis
• • •
Supplier integration Supplier development Management of the supplier base
Systematic integration E.g. resident engineers, early supplier integration, target costing, linking pins Supplier coordination E.g. information and communication management simultaneous engineering, cross cooperation
Fields of identification
Relevant questions
Management of supplier base
How should the operative supplier selection and cooperation with the suppliers be implemented?
Supplier integration
How and when should the procedural and temporal integration of suppliers take place?
Supplier development
How will existing suppliers be promoted and new suppliers be developed?
2
3,00
Product 2 Product Engineering 3 Planning & Design
Supplier Management A Supplier Development Supplier Integration A
Table 1: Different fields of identification
Verification
10
1
supplier is inevitable. Important is the holistic identification that goes beyond individual areas. The following table lists the three major fields of view for an overall identification.
4,00
4
9
5
8
7
6
E. g. partnership, information exchange, targets, controlling, improvements, conflict resolution support, standardization
Figure 2: Systematic improvement of supplier integration in PDP
Step 1: Analysis The first step is based on a three-part analysis, which breaks down as follows: • analysis of manufacturer processes, • supplier manufacturer interface analysis, • analysis of supplier processes. The steps of the three-part analysis are structured chronologically. This means that for the precise analysis of manufacturer supplier interfaces, an analysis of the processes of the manufacturer should first be carried out. The manufacturer is thus the driving force, whose circumstances influence the design of the subsequent processes. The aim of the first step is an explanatory view of the current situation. It provides the basis for the success of subsequent steps. An important point of the combined analysis is the valuation of performance and capability. For this purpose, two different levels must be merged: • PDP, • Supplier Management. The simultaneous consideration of both levels results in a change in the perspective objectives. The PDP focuses mainly on capabilities such as fast and responsive processes, high development productivity, and products with distinction and integrity. [38] In classical Supplier Management, suppliers are mainly used to reduce costs and to cover additional capacity. The integration of suppliers in the PDP not only enables an improvement of development time, cost, and product and process quality, but also brings about more advantages. Such advantages include an improvement in the reliability and durability of the parts, a better use of resources, and the use of additional development expertise, i.e. new know-how. Step 2: Identification The second step is based on the information and data from the actual analysis. The aim of this second step is the identification of improvements in manufacturer supplier collaboration. Even the identification of improvements and design approaches can be carried out on different levels. No matter what the level is, the reduction of waste should be the key aspect to consider. To integrate suppliers systematically, a profound analysis of interfaces between the manufacturer and
A recent German study shows that companies often have wrong targets pertaining to the integration of suppliers, namely to realize cost advantages or to incorporate missing know-how. Many manufacturers have not considered especially supplier development, although it should be an important field of action. It comprises the preselection, audit, assessment, and controlling of suppliers. Step 3: Improvement Management concepts in PD with their methods and principles have a significant impact on the supply chain management. Existing research results show e.g. that especially the LD principles frontloading, Kaizen, and standardized procedures for supplier evaluation have a high impact on Supplier Management. According to a German study, an early involvement of the purchasing department and the set-based concurrent engineering changed the cooperation with suppliers in particular. It requires a high-level relationship with the supplier, which is impossible to attain without a large degree of mutual trust and knowledge exchange. Accordingly, suppliers must choose the best decision for the customer without considering only the cost benefits. [1], [3] Regardless of the respective management concepts, three prominent fields of action can be identified: interface reduction, supplier integration, and supplier coordination. Interface reduction: The growing complexity of PDPs was already mentioned. With the reduction of interfaces between the manufacturer and supplier or between different departments in one organization, a significant amount of complexity reduction can be reached. The goal of the interface design is to achieve an optimal calibration of the necessary interfaces. Measures to reduce the complexity are e.g. to combine tasks, use system suppliers, use supplier prioritization lists, eliminate inactive suppliers, and strive for long-term partnerships. Supplier integration: In production and logistics, comprehensive concepts such as just-in-time for the systematic integration of suppliers in the selected processes already exist. In PD, this concept is to date only very slightly applied. The combination of internal and external functions and processes is vital; a spatial, temporal, and functional integration promises to be the most successful. This integration can be accomplished not only with humanoriented approaches like resident engineering or Likert’s linking pin model, but also with concepts regarding the process and costs such as the method of target costing.
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Supplier coordination: Suppliers and departments of the manufacturer obviously need to be coordinated in a meaningful way. In this regard, purchasing is very important in terms of the inclusion of various departments in the selection and collaboration with suppliers. In fact, it is even more important than PD itself. Examples for areas of supplier coordination include simultaneous engineering, interdepartmental cooperation, knowledge management, and information and communication management. Step 4: Verification As always, it is crucial - and difficult at the same time - to validate the previously mentioned points. One approach to do so is to look at the degree of maturity, which is based on eleven criteria identified by Dombrowski et al. [1] The criteria that need to be evaluated are cooperative partnership, intensive exchange of information, long-term cooperation, firm objectives, regular controlling, continual improvement, cooperative solving of conflicts, support and participation, interdepartmental collaboration, anticipatory and preventive action, and high standardization. However, research shows that different departments have different levels of maturity. Hence, the subsequent comparison must be handled with care. 5. Summary and further research needs Companies have recognized the relevance of supplier integration within the PDP. Studies also confirm this observation. With the illustrated process model, a systematic approach to improve supplier integration is possible. This approach is universally valid and therefore requires an exact specification. Existing research results provide a good basis for the adaptation to the individual case and the required detailing. The topic of interfaces has already been touched upon during the interface reduction. However, the design of these interfaces will be of special importance in the future. This significance is underlined by a qualitative study, which has been conducted as part of an ongoing research project. Specialists from ten German companies therefore primarily see the identification and standardization of such interfaces to be particularly relevant. Although the process model constitutes a good basis in combination with the current literature research, further investigation is therefore necessary. References [1] [2]
[3] [4] [5] [6]
[7] [8]
Dombrowski, U., Karl, A., 2016. Lieferantenintegration im Produktentstehungsprozess: Ergebnisse einer deutschen Studie. ShakerVerlag, Aachen. Dombrowski, U., Karl, A., Schmidtchen, K., 2015. Erfolgsfaktor Lieferantenintegration, in: Dombrowski, U. (Ed.), Lean Development. Aktueller Stand und zukünftige Entwicklungen, 2015, 1. ed. , Springer Berlin, pp. 209-222. Dombrowski, U., Schmidtchen, K., Krenkel, P., 2014. Impact of Lean Development System Implementation on the Prodct Development Process, p. 5 VDI 2870, 2010. Ganzheitliche Produktionssysteme (2010). Verein Deutscher Ingenieure, Düsseldorf. Accessed 7 January 2015, 111 pp. VDI 2220, 1980. Produktplanung: Ablauf, Begriffe und Organisation. Verein Deutscher Ingenieure (VDI), Düsseldorf. Accessed 7 January 2015, 17 pp. Braess, H.-H., Ehlers, C., Hackenberg, U., Widmann, U., 2013. Produktentstehungsprozess, in: Braess, H.-H., Seiffert, U. (Eds.), ViewegHandbuch Kraftfahrzeugtechnik. 7. ed. Springer Vieweg-Verlag, Wiesbaden, pp. 1133-1219. VDI 2221, 1993. Methodik zum Entwickeln und Konstruieren technischer Systeme und Produkte. Verein Deutscher Ingenieure (VDI), Düsseldorf. Accessed 7 January 2015, p. 44. Westkämper, E., 2006. Einführung in die Organisation der Produktion, 1. ed. Springer-Verlag, Berlin, p. 250.
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