The influence of strategy and concurrent engineering on design for procurement

• Pages: 531-554
• Date: 08 May 2017
• DOI: https://doi.org/10.1108/IJLM-03-2016-0081
• Published date: 08 May 2017
• Author: Andrew Arnette,Barry Brewer
• Subject Matter: Management science & operations,Logistics

The influence of strategy

and concurrent engineering

on design for procurement

Andrew Arnette and Barry Brewer

Department of Management and Marketing, University of Wyoming,

Laramie, Wyoming, USA

Abstract

Purpose –The purpose of this paper is to examine the role of strategy and concurrent engineering (CE) in

driving design for procurement (DFP) actions and results via the role of procurement professionals in new

product development (NPD). The strategies of cost leadership, differentiation, and a hybrid approach are

compared, and sequential NPD is compared to a CE approach within a DFP context.

Design/methodology/approach –ANOVA was applied to survey data collected for a series of items

capturing the activities and characteristics relating to procurement for a new product design, as well as the

performance of the product compared to other design events in the firm.

Findings –Several major findings were supported through the analysis. Product-level strategy played a

limited role, at best, in driving the implementation of procurement activities and product performance.

In contrast, high CE intensity was shown to improve procurement activity and product performance. The

results were analyzed along the three dimensions of sustainability, and were especially strong for both

environmental and economic-focused activities and performance.

Practical implications –Managers should work to integrate procurement early into NPD activities, ensure

procurement uses strategy to drive decisions, and can use DFP initiatives from this research to implement a

DFP program.

Originality/value –This research is one of the first attempts to empirically test design-for (DFX)

approaches in NPD. It creates one of the first theoretical frameworks for DFX-related research.

Keywords Purchasing, Sourcing, Supplier relations, New product development

Paper type Research paper

1. Introduction

New product design (NPD) is crucial for companies seeking to extend competitive

advantage, to compete on innovation, or to extend the life of their firm (Gonzalez-Zapatero

et al., 2016). The failure to bring a new product to market can have catastrophic results. Sony

dominated the wearable music business with the Walkman before the advent of digital

music. Their failure to bring new products to market during the rise of the iPod left them on

the outside looking in at the market segment they once dominated (Adner, 2012). To ensure

success during NPD firms must carefully manage the creative process.

Managing for-profit creativity can take many forms. This creative process can be limited

to scientists and engineers locked away in the R&D vaults or can take more of a

collaborative form with professionals from all areas of the company contributing. The R&D

process wherein design is carried out by engineers who then pass along specifications to the

other functional areas in the firm is what we traditionally think of as a sequential approach

to new product design. Concurrent engineering (CE) changes the NPD process to embed

simultaneous diversity and knowledge to shorten time-to-market and ensure processes, cost

goals and that the value proposition is achieved (Dowlatshahi, 1992).

Strategy is the base for important business activities, and NPD is no different.

The product’s business-level strategy should drive design activities to ensure the

design itself enables the company to align all product processes and support activities

to the chosen strategy that will yield the desired value proposition (Ginsberg and

Venkatraman, 1985).

The International Journal of

Logistics Management

Vol. 28 No. 2, 2017

pp. 531-554

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-03-2016-0081

Received 28 March 2016

Revised 7 June 2016

Accepted 13 July 2016

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

531

Design for

procurement

Our research takes a focused view of the NPD process by looking at the role played by

procurement. While NPD has been widely examined, relatively few studies have focused on

the specific outcomes resulting from functionally integrated NPD decisions, particularly

whether or not these outcomes were aligned with the strategic goals that drove the new

design in the first place. As such, this study considers the following research questions:

RQ1. To what extent are the actions and outcomes resulting from procurement

involvement in NPD aligned with business-level strategies?

RQ2. Does procurement involvement on teams following CE principles result in different

procurement activities and performance than NPD efforts not organized according

to CE principles?

As design for procurement (DFP) has very little treatment in the academic or practitioner

press, we feel that the answer to this question will have value to both scholars and

practitioners.

This study examines these questions through an empirical survey methodology. In the

following two sections, the extant literature on DFP, strategy, and CE is reviewed and

hypothesesare developed utilizing contingency theory (CT)and resource orchestration theory

(ROT). Sections4 and 5 detail methodology and results;Sections 6 and 7 discuss theseresults,

consider the study’s contributions and limitations, and a call for future research.

2. Literature review

The literature review is broken down into three sections. The first section discusses DFP,

exploring the idea that procurement considerations can play a role in product design. This is

followed by two sections that focus on key decisions in the NPD process, the selection of a

product strategy and the organization of the NPD process. With respect to strategy, a

decision must be made to whether the product will compete in the market based on low-cost

or differentiation. The organization of the NPD process can follow a sequential approach or

engage in CE; this decision impacts the timing and level of collaboration for procurement

personnel in the NPD process.

2.1 DFP

Design for X (DFX) is an umbrella term for a collection of techniques and considerations that

can be incorporated to improve the design of a new product offering or redesign of an

existing product, where “X”represents different product traits and characteristics or

objectives and goals. Design for manufacturability (DFM) and design for assembly (DFA)

were the first DFX initiatives. Originally, they were developed to provide focus on the

importance and improvement in manufacturing (DFM) or assembly (DFA) stages of

products. The field has expanded to include other issues pertinent to supply chain

implementation for products, such as logistics (DFL) or quality (DFQ), as well as issues

pertinent to the environment (DFE), such as recycling or waste minimization. In a literature

review of design-for techniques utilized in NPD, Arnette et al. (2014) discussed several

findings that informed this research: how appropriate DFX techniques can help facilitate

strategy; the need for theoretical frameworks to be utilized with DFX techniques; and the

lack of empirical research on the impact of many DFX techniques and how they can improve

performance through greater involvement in the NPD process. The concept of DFP is that

procurement engagement in the NPD process will enhance product designs and supporting

supply chain designs. A framework for DFP was proposed based on a workshop with

industry professionals and academic experts in the field of procurement that discusses how

this method could improve value chains and better facilitate the CE process (Pulkkinen et al.,

2012). However, this framework has only been proposed and has not been tested empirically.

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