To date, the scientific literature was very fragmented, with different studies focusing on slightly different concepts and showing somewhat different results. In a recent investigation that I carried out together with Finn Wynstra and Jan Dul from Erasmus University, this literature was put through a systematic review and meta-analysis. This review of more than 11,000 innovation projects has now been published in the Journal of Supply Chain Management. In this meta-analysis, we collect as many scientific investigations as possible looking into the effects of supplier involvement on innovation and new product development outcomes, such as time-to-market and financial performance.
The main finding of this study is that we have to differentiate between involving suppliers early and involving them extensively. Early supplier involvement, in which the buying organisation mainly collaborates with partners to generate more ideas and concepts, has only a marginal effect on the performance of the new product and innovation. Early supplier involvement requires the manufacturer to possess a lot of absorptive capacity, the ability to sense and seize innovations coming from outside (outbound-in open innovation). As this type of supplier knowledge is typically tacit (hard to codify), transferring knowledge across organisational boundaries is hard.
In contrast, extensive supplier involvement allows the buying organisation to directly leverage the knowledge and specialised experience of a supplier for the development of a component. To achieve successful collaboration here, the buying organisation does not need to absorb knowledge, but only manage the connections and interfaces between the supplier’s design and development and other parts, using what the literature labels a connective capacity. Extensive supplier involvement, our research shows, leads to more innovative products, higher quality, lower cost, faster time-to-market, and overall better market performance of the new products.