Shades of the Innovation-Purchasing Function — The Missing Link of Open Innovation

Abstract

This paper seeks to instigate a new area of research in the Early Purchasing Involvement (EPI) literature around the question: How should a Purchasing function evolve in order to identify and capture innovation in the supplier market? Particularly, we attempt to characterise the specificities of the Innovation-Purchasing function, an emerging function acting in the fuzzy-front-end of projects. The contribution of this paper is a reification of the role of this function in an Open Innovation context, through the description of Early Purchasing Involvement in the Innovation (EPI2) agenda. For that, we collected data through an internal benchmarking study within a multinational/multidivisional firm of the automotive sector. Our study reveals similarities and differences between the observed practices of what we call EPI2 and the more classical EPI activities in a New Product Development (NPD) context. This study provides a model that can help practitioners and raises some propositions to test in new research.

Exploring early purchasing involvement in discontinuous innovation: A dynamic capability perspective

“…Building on a dynamic capabilities perspective, we developed two propositions to elaborate theory and guide further research into EPI in NPD. Our propositions extend prior research on purchasing involvement in NPD literature (Melander and Lakemond, 2014;Mikkelsen and Johnsen, 2019;Schiele, 2010;Servajean-Hilst and Calvi, 2018;Wynstra et al, 2003) by arguing that renewing and regenerating existing purchasing capabilities is an important prerequisite for purchasing managers to play an effective role in this type of innovation. The case-study method was appropriate, as it allowed for flexibility in terms of the scope and aim of the study over time.…”

“…Our findings extend prior research on purchasing involvement in NPD literature (Luzzini et al, 2015;Melander and Lakemond, 2014;Mikkelsen and Johnsen, 2019;Schiele, 2010;Servajean-Hilst and Calvi, 2018;Wynstra et al, 2003) by offering empirical evidence on how purchasing managers may adapt existing sourcing and supplier relationship management capabilities to cope with discontinuous innovation challenges. We develop two propositions to guide future research into a dynamic capability perspective of EPI.…”

“…The role of purchasing in NPD and innovation has been identified as an essential enabler in scanning supplier markets, identifying suppliers that can become part of NPD project teams, and managing buyer-supplier relationships to ensure appropriate levels of integration and performance (Lakemond et al, 2001;Cousins et al, 2011;Servajean-Hilst and Calvi, 2018). As supplier involvement is the result of interactions between buying and supplying firms, the positive or negative influence of supplier involvement depends on the role played by the purchasing department, which is responsible for the supplier's contribution to the buying firm's processes (Wynstra et al, 2003).…”

“…Existing research in innovation management shows that to discontinuous innovation requires the development of new capabilities within the firm and outside with other firms such as "non-linear, highly explorative and experimental organizational processes, involving probing and learning rather than targeting and developing" (Bessant et al, 2005;Lynn et al, 1996;Phillips et al, 2006b). Discontinuous innovation creates several new challenges for purchasing in relation to searching for supplier innovation and to sourcing new technologies that may previously have fallen under the domain of research and development (R&D) management (Cousins et al, 2011;Luzzini et al, 2015;Mikkelsen and Johnsen, 2019;Schiele, 2010;Servajean-Hilst and Calvi, 2018).…”

Characterization of Best Practices for Customer/Supplier Collaboration in Co-innovation Projects

“…Thus an important competence is the ability to manage the interface between the two companies. In the customer/supplier relationship, the customer's purchasing department is often nominated to handle the interface between the two companies (Luzzini, Amann, Caniato, Essig, & Ronchi, 2015 ;Patrucco et al, 2017 ;Servajean-Hilst & Calvi, 2018). This organizational function, which evolves into a strategic function, is perfectly positioned to identify and capture external opportunities (Maier, Rück, & Brem, 2017).…”