NEW PRODUCT DEVELOPMENT AND EARLY SUPPLIER INVOLVEMENT (ESI) - THE DRIVERS OF ESI ADOPTION

This paper reports the results of an empirical study that probed the a doption of early supplier involvement (ESI) in the product development process. ESI is defined as a form of vertical co-operation in which m anufacturers involve suppliers at an early stage in the product develo pment/innovation process, generally at the level of concept and design . Previous research has shown that Western automobile manufacturers ob tained significant benefits by emulating the ESI practices of their Ja panese competitors; the bulk of research knowledge is, in fact, locate d in this domain. This study focused on a group of assembly-based indu stries outside the automotive setting to determine if the adoption and benefits of ESI are found in other domains as well. Twenty-five compa nies in three non-automotive industries participated in the research. A model of ESI adoption was developed and tested, and an ESI index cre ated to determine the degree to which this practice was applied. The r esults reveal, among other things, that the level of ESI practice is s trongly related to a higher number of supplier base initiatives, lower product integration, broader supplier scope and a higher proportion o f parts purchased. Significant results were also obtained in compariso ns between industry sectors and geographic regions (USA, Western Europ e and Japan). We suggest that promising directions for future research include broad-based samples across industrial sectors and industry-fo cused empirical study.