THE DRIVERS OF COOPERATION BETWEEN BUYERS AND SUPPLIERS FOR PRODUCT INNOVATION

This article reports the results of an empirical study that probed the adoption of Early Supplier Involvement (ESI) in the product developme nt process. ESI is defined as a form of vertical cooperation where man ufacturers involve suppliers at an early stage in the product developm ent/innovation process. generally at the level of concept and design. Previous research has shown that Western automobiles manufacturers obt ained significant benefits by emulating the ESI practices of their Jap anese competitors; the bulk of research knowledge is, in fact, located in this domain. This study focused on a group of assembly-based indus tries outside the automotive setting to determine if the adoption and benefits of ESI are found in other domains as well. Twenty-five compan ies in three non-automotive industries participated in the research. A model of ESI adoption was developed and tested, and an ESI index crea ted to determine the degree to which this practice was applied. The re sults reveal. among other things, that the level of ESI practice is st rongly related to a higher number of supplier base initiatives, lower product integration, broader supplier-scope and a higher proportion of parts purchased. Significant results were also obtained in comparison s between industry sectors and geographic regions (USA, Western Europe and Japan). We suggest that promising directions for future research include broad-based samples across industrial sectors and industry-foc used empirical study. (C) 1998 Elsevier Science B.V. All rights reserv ed.