Abstract:Integrating suppliers into new product development (NPD) projects offers manufacturers the potential for substantial improvements in the new product being designed. However, it also creates significant inter‐organizational integration diseconomies that can negatively affect the manufacturing cost and performance of the designed product. We propose that these diseconomies can be reduced to the extent that the manufacturer is able to design modular products — i.e., it has a modular design competence (MDC). We al… Show more
“…In this study, we proposed and confirmed a contextual effect of supply base R & D on the link between a focal firm's own R & D, commercialization and its performance. These results are consistent with a cooperative view of ACAP (Malhotra et al., ) as well as results reported in the supplier integration literature (Koufteros et al., ; Narasimhan et al., ; Perols et al., ; Salvador & Villena, ). Researchers have found that a focal firm's supply base contributes to the ability of the focal firm to enhance its own R & D and commercialization choices.…”
We show that the ability of a firm to enhance its performance through R & D and commercialization efforts is dependent on the alignment of R & D intensity of the firm's supply base with its own R & D intensity. We employ a multi‐industry dataset consisting of 163 focal firms and their supply bases, spanning the years 1976 to 2009. Focal firms that have higher R & D expenditure compared to their industry average, enjoy greater performance benefits from their own R & D and commercialization efforts, as compared to when they have a Low R & D‐intense supply base. On the other hand, focal firms with lower R & D expenditure compared to their industry average, benefit more from their own R & D and commercialization expenditure when they have a High R & D supply base. When levels of R & D expenditure are matched with respect to the supply base (Low–Low or High–High), focal firms tend to derive less marginal performance benefits from their own R & D and commercialization expenditures. This pattern of results constitutes a “polarity effects” phenomenon, i.e., unlike poles attract. Further, for the High R & D focal firm–Low R & D supply base combination (and vice versa), we show that although both R & D and commercialization efforts have a separate and positive effect on the focal firm's financial performance; taken together, they have a negative synergy. Through a response surface analysis, we are able to show that there is a commercialization threshold, below which the Low R & D focal firm–High R & D supply base derives lower total benefits as compared to a High R & D focal firm–Low R & D supply base combination.
“…In this study, we proposed and confirmed a contextual effect of supply base R & D on the link between a focal firm's own R & D, commercialization and its performance. These results are consistent with a cooperative view of ACAP (Malhotra et al., ) as well as results reported in the supplier integration literature (Koufteros et al., ; Narasimhan et al., ; Perols et al., ; Salvador & Villena, ). Researchers have found that a focal firm's supply base contributes to the ability of the focal firm to enhance its own R & D and commercialization choices.…”
We show that the ability of a firm to enhance its performance through R & D and commercialization efforts is dependent on the alignment of R & D intensity of the firm's supply base with its own R & D intensity. We employ a multi‐industry dataset consisting of 163 focal firms and their supply bases, spanning the years 1976 to 2009. Focal firms that have higher R & D expenditure compared to their industry average, enjoy greater performance benefits from their own R & D and commercialization efforts, as compared to when they have a Low R & D‐intense supply base. On the other hand, focal firms with lower R & D expenditure compared to their industry average, benefit more from their own R & D and commercialization expenditure when they have a High R & D supply base. When levels of R & D expenditure are matched with respect to the supply base (Low–Low or High–High), focal firms tend to derive less marginal performance benefits from their own R & D and commercialization expenditures. This pattern of results constitutes a “polarity effects” phenomenon, i.e., unlike poles attract. Further, for the High R & D focal firm–Low R & D supply base combination (and vice versa), we show that although both R & D and commercialization efforts have a separate and positive effect on the focal firm's financial performance; taken together, they have a negative synergy. Through a response surface analysis, we are able to show that there is a commercialization threshold, below which the Low R & D focal firm–High R & D supply base derives lower total benefits as compared to a High R & D focal firm–Low R & D supply base combination.
“…These activities assimilate information acquired from customers and suppliers, allowing for the inclusion of superior technologies and materials in the early stages of product design (Lakemond, Echtelt & Wynstra, 2001;Petersen, Handfield & Ragatz, 2005;Song & di Benedetto, 2008;Yan & Dooley, 2014). Thus, it is insufficient to simply acquire information, but rather benefits emerge through leveraging suppliers' expertise in a cooperative fashion (Morris & Carter, 2005;Nellore, 2001;Salvador & Villena, 2013;Tan & Tracey, 2007;Tracey, 2004). This infers the importance of information assimilation during NPD as a dimension of AC (Parker, Zsidisin & Ragatz, 2008;Rogers, Lambert & Knemeyer, 2004).…”
Section: Responsive Strategy Absorptive Capacity and Firm Performancementioning
Information management is a core supply chain activity that is increasing in importance as firms strive to become more responsive to growing customer demand for innovative products. However, effective processing of information from customers and suppliers remains a struggle for most firms. Absorptive capacity provides a useful view of information processing activities, but the current understanding of how firms use it to improve performance and why some firms seem to develop it while others do not remains unclear. This study is grounded in information processing theory, and examines the role of absorptive capacity in linking a firm's responsive strategy and performance. We test a structural equation model on data from 711 manufacturing firms, and validate our results on a second sample of 677 firms. Our study makes three major contributions by providing evidence that: (1) absorptive capacity is motivated by a firm's responsive strategy; (2) it fully mediates the relationship between responsive strategy and firm performance, indicating that absorptive capacity is a necessary competence for firms that aim to deliver innovative products to customers; and (3) the relationship between responsive strategy and absorptive capacity is U‐shaped, indicating that when firms attempt to blend efficient and responsive strategies, their ability to develop absorptive capacity is diminished.
“…Importantly, foregoing research has not examined possible mediators of supply chain intelligence that might explain these mixed findings. The influence of supply chain intelligence integration is therefore in need of further study (Salvador & Villena, 2013;Wowak, Craighead, Ketchen, & Hult, 2013), especially pertaining to its influence on the specific outcome of new product launch success.…”
Many new product introductions continue to be unsuccessful, and while researchers have studied product development processes, relatively few studies directly address new product launch. We do so in the present research and posit that supply chain intelligence, defined as technological and competitive knowledge sourced and integrated from suppliers, customers, and competitors, plays an important role in explaining new product launch success. We further employ the knowledge‐based view to theorize that both supply chain adaptability and product innovation capability act as important mediators of the effects of supply chain intelligence on new product launch success and firm financial performance. While the former capability refers to a firm's ability to quickly adjust its supply chain to react to market and product design changes, the latter refers to the firm's proficiency in developing innovative new products. We test hypothesized relationships among these factors utilizing data collected in a survey of 229 U.S. manufacturing firms. Results point to the central role of supply chain adaptability in capturing the benefits of supplier technological intelligence for enhanced product innovation capability, new product launch success, and firm financial performance. In contrast, product innovation capability serves as the generative means by which customer and competitor intelligence is translated into more successful new product launches, which, in turn, produce superior firm financial performance. Overall, these findings contribute to a better understanding of factors that can explain why certain product launches are more successful than others, and offer practical insights for appropriate investments in the development of related knowledge resources.
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