Platform management and early supplier involvement in NPD

Platform strategies reflect a firm’s technology policy towards its new product development (NPD) activities. Depending on the technological complexities embedded in the platform, certain degree of interdependence is created between the firm and its suppliers. Firms may decide to what extent the suppliers should be involved in its NPD activities. There has been an increasing interest with issues related to supplier involvement in NPD. Involving suppliers early in NPD can help firms reduce costs, reduce concept-to-customer development time, improve quality, and provide innovative technologies. However, it requires a great effort and many tradeoffs need to be considered. This paper discusses the implications of early supplier involvement in new product development, specifically regarding to sourcing decisions and NPD processes when new components are designed and incorporated into the new platform. We would like to understand to what extent the NPD collaborates with suppliers, and at which stage of the NPD process suppliers are invited to participate in platform designs. A case study of Oticon, a Danish manufacturer of hearing aids, is presented. We describe how the successful introduction of a new platform of hearing aids is realized as well as how and when Oticon’s suppliers were involved during this process.