An Empirical Study of Knowledge Transfer in Working Relationships With Suppliers in New Product Development

Abstract

This study examines the factors (trust, communication, supplier relationship specific adaptations, supplier flexibility, and relationship history) that influence knowledge transfer from the supplier to the customer firm in new product development, and the impact of knowledge transfer on product development performance. It also suggests that knowledge tacitness moderates these relationships. Based on a sample of 186 US firms, this study finds that trust, communication, supplier relationship specific adaptations, and supplier flexibility influence knowledge transfer. Knowledge transfer, in turn, has an effect on new product development performance. Mixed findings have also been reported in this paper with respect to the moderating effects of knowledge tacitness. Trust, supplier flexibility, and relationship history are more important for tacit knowledge transfer than for explicit knowledge. Knowledge tacitness does not moderate the relationship between knowledge transfer and NPD performance. However, the results show that both tacit and explicit knowledge transfer significantly affects NPD performance.

Managing supplier relationships in a new product development context

“…Establishing a successful buyer-supplier relationship is a key strategy to attain and increase competitive advantage as it enables the buyer (and vice versa) to gain benefits that are unlikely to come from traditional transactional relationships . The advantage of establishing relationships with suppliers and supplier integration is the potential optimization of the supplier's and customer's core competencies in NPD, thus allowing both parties to excel in performance (Zhao & Lavin, 2012). Thus, by managing suppliers effectively, the performance of the buying firm is more likely to increase Lawson, Petersen, Cousins, & Handfield, 2009).…”

“…Without communication, there cannot be any relationship build-up. The performance of the relationships depends on the appropriateness and effectiveness of the communication (Knudsen, 2007;Kale, Singh, & Perlmutter, 2000;Sivadas & Dwyer, 2000;Walters & Rainbird, 2007;Knudsen, 2007;Sivadas & Dwyer, 2000;Lorange, Roos, & Brønn, 1992;Zhao & Lavin, 2012). Furthermore, information & knowledge sharing between the buyer and supplier and within the NPD project helps the generation and recombination of new and innovative ideas.…”

“…These constructs are: Relationship-specific adaptations & investments (Dyer, 1997;Jap, 2001;Zhao & Lavin, 2012); satisfaction ; dependency & power (Gadde & Snehota, 2000;Wognum, Fisscher, & Weenink, 2002); flexibility (Zhao & Lavin, 2012); reputation ; loyalty and; relationship history (Handfield, Ragatz, Petersen, & Monczka, 1999;Zhao & Lavin, 2012). Strong inter-firm relationships have a positive impact on efficiency and on the effectiveness of the NPD process (Lin & Huang, 2013).…”

“…Literature has acknowledged that knowledge transfer facilitates the generation of resources and skills essential for product innovation (Zhao & Lavin, 2012;Clark & Fuijmoto, 1991;Clark, 1989). With the additional knowledge of a supplier, a buyer is more likely to generate new product ideas, develop them more quickly, resulting in higher NPD performance (Zhao & Lavin, 2012;Brown & Eisenhardt, 1995).…”

Construction of an open innovation network and its mechanism design for manufacturing enterprises: a resource-based perspective

“…In particular, Early Supplier Involvement (ESI) is regarded as a form of vertical collaboration between the supply chain partners, in which a manufacturing enterprise integrates a supplier, with a qualified proven performance history (defined as the strategic supplier in this article), at an early stage of the New Product Development (NPD) process (Mikkola and Skjøtt-Larsen 2006). Moreover, the supplier, by being involved at the early stage of the R&D process, can bring useful knowledge about how to improve the new product's quality, facilitate its manufacturability, or suggest ideas that strengthen the performance of the NPD process (Sivadas and Dwyer 2000;Zhao and Lavin 2012).…”