Resource interaction in product development: a cross-functional analysis

Paper in proceeding, 2018

Inter-organizational collaboration and joint resource combining is a necessity in new product development (NPD) in order to access technology and knowledge of various actors. The aim of this paper is to investigate how customer relationships in NPD involving technology that is new to the firm affects product development. A single case study is conducted at a world leading industrial tool manufacturer. The project under study is the development of a product that is new to the firm, a new application, that involves a world leading automotive manufacturing customer as well as two specialized suppliers. In their efforts of developing a hand-held digitalized tool for quality assurance in the production of cars numerous resources are combined over time, crossing the boundaries of several actors. Data has been collected through semi-structured interviews with nine representatives of three units of the industrial tool manufacturer. In addition, secondary data in the form of protocols and other documents containing information of the product development process provide important input to the case. Analysis of the case consists of identification of key resource interactions in the product development process where business relationships are of significant importance. Thus, inter-organizational interaction comes in focus and in combination with analysis of cross-functional collaboration several findings are revealed. The study points to the meaning of managing knowledge sharing with external partners as well as within the focal firm. Having customer and supplier relationships in order to organize and manage collaborative development is of significant importance for firms that traditionally focus on manufacturing hardware products to provide digitalized products. The study thus demonstrates how product focused firms embrace new digital technology. In addition, customer contribution varies over time depending on the need for specialized resources, for instance, technology and knowledge, as in-put for the product development through joint resource combining. Accordingly, relationships with external partners are managed differently depending on their scope of contribution in the product development project. Finally, the study shows that in addition to fruitful external relationship collaboration, firms need to have well-functional collaboration among various internal functions in order to reap the most benefits from external collaborations in NPD.