Suppliers hold sway with designers

9 August 2000
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10 August 2000 | David Arminas

Suppliers have the most influence over new-product introduction (NPI), but supplier relationships are the most difficult in business to manage, according to a new report.

Under Pressure: NPI Fails to Perform from IBM Global Services, found that design professionals in the aerospace and automotive industries think that suppliers are more important to the development of new products than customers, who were thought to be the second-most influential group.

Considered the least potential for aiding the NPI process was the government and trade bodies.

But supplier relationships were also found to be a problem. Sixty per cent of the 150 respondents from companies across Europe rated suppliers' inability to meet technical, cost and delivery requirements as the main business pressure on NPI.

Seventy per cent of respondents deemed customers changing their requirements as the main pressure, while 65 per cent said that it was finding and managing designers.

Around 70 per cent of respondents expressed dissatisfaction with purchasing departments, and just 20 per cent rated purchasing and supply staff as being adaptable.

"It may be unkind, but it could reflect the mutual distrust between the design and purchasing functions," said Phil Hanson, IBM's north European manufacturing practice leader.

But the fact that suppliers are seen as central to the NPI process shows that designers realise there needs to be a better understanding and handling of the purchasing function by all concerned, added Hanson.

Distrust between designers and buyers has indeed been a problem, agreed Peter Cooke, professor of automotive industry management at Nottingham Trent University's Nottingham Business School.

"Design people want to build a Rolls-Royce, purchasers want to buy a Lada," he said.

But the automotive sector is moving away from pure procurement, added Cooke. "Firms that aren't playing the value-added game will lose out."

IBM's report also found that many firms have "ambitious" targets, aiming to, in effect, halve cycle times and cut NPI costs by between 20 per cent and 30 per cent over three years.

Hanson said that the increasing use of the Internet by second-tier suppliers to link into manufacturers' purchasing and production processes will help to involve them more at the design stage.

* The report is available from IBM on 023 9256 5846, price £49.50.

SMaug2000

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