Product Architecture and Organizational Architecture: An analysis of Supplier Integration into New Product Development



The literature claimed the relevance of product architecture and innovativeness in determining the inter-firm organizational configuration for product development and manufacturing. Different innovative dynamics have to be managed by different organizational configurations: market, vertical integration, hybrid forms (Brusoni et al., 2001). Product architecture has to be matched by organizational architecture: i.e. modular product and modular organizations (Ulrich, 1995; Fine, 1998). These two dimensions determine the vertical integration of the manufacturing activity (Novak and Eppinger, 2001). Nevertheless the empirical literature did not show the effects of system architecture and innovativeness, and the interaction between them, on the inter-firm organization of development activities. In order to address this literature gap I studied the integration of the suppliers into the OEMs’ new product development (NPD) processes, considering two basic dimensions: the development responsibility sharing and the coordination systems implementation (Clark and Fujimoto, 1991). The purpose of my work is to theoretically model and empirically validate a contingent framework, by considering how component centrality in the system architecture and its innovativeness affect the degree of supplier integration into NPD and, by that, the final development outcome. The level of analysis is the component purchased. For component innovativeness I mean the degree in which its development represents a change in the knowledge base of the buying firm, in line with the literature on innovation (Garcia and Calantone, 2002). The component centrality represents the level of dependence of the component from the rest of the system (Sosa et al., 2006).Empirically, I address the abovementioned questions by studying the development of a new engine for high-performance cars, by one of the leading European car manufacturer. For the data collection and analysis I used instruments such as the Design Structure Matrix (DSM) and the Social Network Analysis (SNA). Based on this case-study I proposed a new classification of components and assess the implications for inter-organizational dynamics. The future research will consider other development processes (different firms and different systems) within the automotive industry, in order to validate the preliminary findings of this case study.

This work aims to offer two contributions to new product development research. First it wants to integrate three separate streams of research in this field: product architecture, product innovation and supplier integration. The second contribution is the development of a contingent framework, that could evidence how the supplier responsibility and the internal-external technical information exchange have to be defined according to the component innovative dynamic and architectural position, analyzing the implications on the development performances.

Contact information:
Prof.dr. J.Y.F. Wynstra