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 TeamsWhy include suppliers as part of a buyer’s improvement teams?Research reveals that most organizations recognize the potential benefit of closer inter-organizational relationshipsResearch 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 TeamsWhy 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 suppliersGreater effort put forth on team assignment4Buyer-Seller Improvement TeamsWhy 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 ideasProviding quality improvement ideasSupporting actions to improve material deliveryOffering process technology suggestionsSupporting material ordering cycle time reductions5Buyer-Seller Improvement TeamsKey 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 taskMembers should “buy-in”Members should havetask knowledgetime availabilityability to work in a groupa “big picture” perspectiveno hidden agendasOrganizational 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 awardOverall team performanceIndividual member performanceAre awards and recognition valuableImportant Questions That Every Cross Functional Team (CFT) Should Ask10Question # 4: Has the CFT established effective Performance GoalsGoals should be explicitGoals should focus on end resultsExternal pressure to establish goals usually results in setting difficult goalsTeams, 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” syndromeSupplier concern over proprietary cost informationBuying company concern over proprietary cost informationTime required to identify and integrate a supplierBuying company concern over proprietary technologyLack 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 TARGETSMarket-based targetsClearly defined performance metrics and targetsCostDevelopment scheduleProduct performance (weight, size, speed, etc.)Supplier input/buy-inCritical with a less-familiar supplierDEVELOPMENT EFFORT MUST BE TARGET-DRIVEN, WITHWELL-DEFINED AND AGREED-TO TARGETS19INFORMATION SHARINGConfidentiality, non-disclosure agreementsTrust developmentDirect function-to-function cross-company communicationOpen sharing of informationCustomer requirements informationCost informationTechnology roadmapsLinked information systemsEFFECTIVE COMMUNICATION AND INFORMATION SHARING IS CRITICAL20INSTITUTIONAL LEARNINGPost-project review/auditInclude supplier in evaluationSharing of lessons learnedContinuous improvement orientationSUPPLIER INTEGRATION IS A DIFFICULT PROCESS THATMAY NOT GO RIGHT THE FIRST
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