PROCUREMENT PROCEDURES FOR SUPPLIER INTEGRATION AND OPEN INNOVATION IN MATURE INDUSTRIES

Abstract

The development and installation of new process equipment in production plants typically require strong collaborative efforts by a process firm and its equipment suppliers. However, existing knowledge about how such supplier integration and open innovation practices should be organized and managed is scarce. The purpose of this investigation is therefore to explore how process firms can organize and manage supplier integration and open innovation practices when developing and installing new process technology. By means of a literature review and a case study of two process firms, a lifecycle perspective on procurement is adopted. Our results show that the process firms utilize different interconnected cooperative procurement procedures in different stages of the equipment's lifecycle, in order to enhance integration both in buyer-supplier dyads and among the suppliers in the project network. The contributions of the paper are summarized and illustrated in a developed lifecycle-based procurement model that guides practitioners in organizing and managing supplier integration and open innovation practices.