WHY AND HOW TO INVOLVE PURCHASING IN NEW PRODUCT DEVELOPMENT?

Abstract

In new product development (NPD) firms increasingly have to rely on external expertise from suppliers. However, results of early supplier integration have been found to be ambiguous. This research empirically tests the hypothesis that the participation of professional purchasing agents early on in the supplier integration process plays a decisive role to distinguish successful projects. Our sample gave evidence that early supply management integration positively moderated supplier involvement’s effect on firm success. Hence, firms may benefit from avoiding supplier integration without professional purchasing management. Still, in many firms the procurement department is not yet integrated in NPD processes early on. Our research identifies four measures those firms applied, in which purchasing got fully embedded in the innovation process: top-management support, structural differentiation, explicit processes, and a collaborative corporate culture. This finding can serve as blue print for implementing purchasing integration and therewith improve the success of supplier integration in NPD.