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Chapter 5Buyer-Seller Improvement TeamsSlide 3Slide 4Buyer-Seller Improvement TeamsSlide 6Slide 8Slide 9Slide 10Slide 11Slide 12Key DriversProduct Development ProcessWhy Suppliers Aren’t Used in New Product DevelopmentSlide 16Slide 17Slide 18Slide 19Slide 201Chapter 5Purchasing And Boundary SpanningIDIS 424 Spring 20042Buyer-Seller Improvement TeamsWhy include suppliers as part of a buyer’s improvement teams?Research reveals that most organizations recognize the potential benefit of closer inter-organizational relationshipsResearch also reveals that teams that relied on supplier input and involvement (when the task warranted involvement) were more effective in their task, on average, than teams that did not involve suppliers3Buyer-Seller Improvement TeamsWhy include suppliers as part of a buyer’s improvement teams?Teams that include suppliers as participants report important outcomes--Greater satisfaction concerning the quality of information exchange between the team and key suppliers Higher reliance on suppliers to support directly the team’s goals--supplier is a resource Fewer problems coordinating work activity between the team and key suppliersGreater effort put forth on team assignment4Buyer-Seller Improvement TeamsWhy include suppliers as part of a buyer’s improvement teams?Teams that include suppliers as participants report important outcomes--Greater supplier contribution across many performance areas Providing cost reduction ideasProviding quality improvement ideasSupporting actions to improve material deliveryOffering process technology suggestionsSupporting material ordering cycle time reductions5Buyer-Seller Improvement TeamsKey Issues:Who has ownership of the process?Which suppliers should we involve?Should involvement be ad hoc or continuous?How can we motivate suppliers to participate?How can we motivate internal participants?How do we overcome the barriers associated with using teams?6Six Important Questions That Every Cross Functional Team (CFT) Should Ask7Question # 1: Do we consider CFT planning Issues?Select a meaningful taskMembers should “buy-in”Members should havetask knowledgetime availabilityability to work in a groupa “big picture” perspectiveno hidden agendasOrganizational resources should be availableImportant Questions That Every Cross Functional Team (CFT) Should Ask8Question # 2: Is top management practicing “subtle Control” over the CFT?Important Questions That Every Cross Functional Team (CFT) Should Ask9Question # 3: Do we recognize and awardOverall team performanceIndividual member performanceAre awards and recognition valuableImportant Questions That Every Cross Functional Team (CFT) Should Ask10Question # 4: Has the CFT established effective Performance GoalsGoals should be explicitGoals should focus on end resultsExternal pressure to establish goals usually results in setting difficult goalsTeams, in general, tend to set more difficult goalsImportant Questions That Every Cross Functional Team (CFT) Should Ask11Question # 5: Are Key Suppliers and Customers part of the CFT?Important Questions That Every Cross Functional Team (CFT) Should Ask12Question # 6: Does the CFT Have the Ability to Self-diagnose the quality of its interaction and performance?Important Questions That Every Cross Functional Team (CFT) Should Ask13SUPPLIER INTEGRATIONINTONEW PRODUCTDEVELOPMENTCorporateDownsizingGlobalCompetitionShortenedProductLife CyclesQuality andReliabilityImprovementsCustomerExpectationsCycle Timeand CostReductionRapidTechnologicalChangeCoreCompetencyFocusKey Drivers14Product Development ProcessEngineering and Design1IdeaGeneration Prototype/ Ramp-UpFull ScaleOperationsConceptDevelopment Business/Technical Assessment (Preliminary)2345Possible Supplier Integration Points15Why Suppliers Aren’t Used in New Product Development“Not Invented Here” syndromeSupplier concern over proprietary cost informationBuying company concern over proprietary cost informationTime required to identify and integrate a supplierBuying company concern over proprietary technologyLack of processes for integrating suppliers16SPECTRUM OF SUPPLIER INTEGRATIONNone “Gray Box”No supplierinvolvement.Supplier“makes to print.”“White Box” Informal supplierintegration. Buyer “consults” with supplier on buyer’s design.Formalized supplierintegration. Jointdevelopment activity between buyer andsupplier.“Black Box”Design is primarily supplier driven,based on buyer’sperformancespecifications.Increasing Supplier Responsibility17SUPPLIER INTEGRATION PROCESSEstablishinternal corecompetencies& capabilitiesEstablish new productrequirementsSelectsupplier(s)& buildrelationshipsAlign objectives &technologyroadmapsGivesupplier(s) anactive roleShareinformationopenly &extensivelyJointlyestablish clearmetrics &targetsMonitor& learn fromexperience123 4567818METRICS AND TARGETSMarket-based targetsClearly defined performance metrics and targetsCostDevelopment scheduleProduct performance (weight, size, speed, etc.)Supplier input/buy-inCritical with a less-familiar supplierDEVELOPMENT EFFORT MUST BE TARGET-DRIVEN, WITHWELL-DEFINED AND AGREED-TO TARGETS19INFORMATION SHARINGConfidentiality, non-disclosure agreementsTrust developmentDirect function-to-function cross-company communicationOpen sharing of informationCustomer requirements informationCost informationTechnology roadmapsLinked information systemsEFFECTIVE COMMUNICATION AND INFORMATION SHARING IS CRITICAL20INSTITUTIONAL LEARNINGPost-project review/auditInclude supplier in evaluationSharing of lessons learnedContinuous improvement orientationSUPPLIER INTEGRATION IS A DIFFICULT PROCESS THATMAY NOT GO RIGHT THE FIRST


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