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J. Eng. Technol. Manage.

26 (2009) 114

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J. Eng. Technol. Manage.


journal homepage: www.elsevier.com/locate/jengtecman

Collaborative concept development using supplier


competitions: Insights from the automotive industry
Benedikt Langner, Victor P. Seidel *
Sad Business School, University of Oxford, Park End Street, Oxford OX1 1HP, United Kingdom

A R T I C L E I N F O A B S T R A C T

Article history: Firms may seek to collaborate with skilled suppliers not only to
Available online 1 April 2009 access existing technologies but also to jointly develop new
concepts. We sought to examine the details of collaborative
JEL classication: concept development through matched cases of novel convertible
O32 (Management of Technological roof projects in the European automotive industry. The result is a
Innovation and R&D) three phase model marked by the use of supplier concept
competitions to probe possible features and by the selective
Keywords:
Concept development
maintenance of distance to suppliers. Knowledge transfer and integra-
Technological tion practices, differences depending on initial experience, and
collaborations implications for managing such distributed systems of innovation
Supplier involvement are highlighted.
2009 Elsevier B.V. All rights reserved.

1. Introduction

With the goal to develop highly novel innovations, manufacturing rms may engage technology
suppliers not only as sources of existing component parts but also as collaborators in joint product
development. In the automotive industry, collaboration between the primary original equipment
manufacturer (OEM) automotive rms and skilled suppliers is an example of such activity (Wynstra
et al., 2001), in some cases involving suppliers as early as the concept development stage (Bonaccorsi
and Lipparini, 1994). Indeed, concept development practices can have signicant impact on
innovation outcomes (Krishnan and Ulrich, 2001). While past studies have shown that many
manufacturers now involve their suppliers in concept development (McIvor et al., 2006), the details of
such collaborative processes are not well understood, especially with the respect to the roles that both
sides take and how these roles might change over time.

* Corresponding author. Tel.: +44 1865 288 912.


E-mail address: victor.seidel@sbs.ox.ac.uk (V.P. Seidel).

0923-4748/$ see front matter 2009 Elsevier B.V. All rights reserved.
doi:10.1016/j.jengtecman.2009.03.007
2 B. Langner, V.P. Seidel / J. Eng. Technol. Manage. 26 (2009) 114

In this study we investigated collaborative concept development, the process whereby both the
OEM rm and the supplier take active roles in developing and inuencing how the concept is rened
into an actual product. By taking an in-depth investigation of two projects in which an automotive
OEM rm and supplier jointly developed new concepts for novel convertible roof systems, a process
model could be inducted to provide insight on the changing nature of relationships among
collaborators. Furthermore, we were interested in how this process might differ for rms that have a
higher or lower level of experience with the technology in question.

2. Collaborative product development

Studies of collaborative product development have identied both the opportunities and
challenges of inter-rm innovation. Research in this domain can be described across two main areas:
research on the potential outcomes of collaborative development and on the specic management
practices involved.

2.1. The opportunities and challenges of collaborative development

Collaborative product development in many past studies has been shown to lead to benets in
development time (Droge et al., 2000), quality (Clark, 1989) and cost (Kamath and Liker, 1990). The
positive impact on development cost and time can be the result of many factors. Skilled supplier
resources can help to reduce the critical path of the development project (Clark and Fujimoto, 1991),
and collaboration may enable early problem-solving, leading to a stronger focus on manufacturability
from the beginning (Clark and Fujimoto, 1991; Handeld, 1994). Production costs can be reduced
when the manufacturing knowledge of suppliers brings opportunities for simplied production into
the development process (Dyer and Ouchi, 1993; Kamath and Liker, 1990). With respect to product
quality, Clark (1989) suggested that through skilled supplier involvement more uniquely designed
components may be used, leading to improved product performance. One benet associated
specically with front-end collaborative concept development is in the setting of cost and
performance specications early in the process (Petersen et al., 2003).
For suppliers, collaboration with OEM rms provides an important means of rening newly
developed technologies, which they can then market to other manufacturers (Takeishi, 2001). In
addition, collaboration has been shown to correlate to a positive effect on suppliers nancial return
and innovative capabilities (Chung and Kim, 2003).
Challenges with collaboration have also been identied. Contrary to studies demonstrating shorter
development times, Eisenhardt and Tabrizi (1995) found that collaboration may slow the
development process, such as in their study set in the turbulent computer hardware industry.
Furthermore, collaborating with suppliers can create substantial costs for managing the relationship
(Bruce et al., 1995). In addition, by involving suppliers in product development, OEM rms run the risk
of losing knowledge, as competitive-relevant information is disseminated through suppliers (Littler
et al., 1995) or capabilities are lost as the rm struggles to stay up-to-date (Takeishi, 2002).
Collaboration can also mean the manufacturer is locked-in to a given technology (Handeld et al.,
1999). For suppliers there is the risk of not getting a return on investment (Helper et al., 2000) or of
having OEMs use information provided to squeeze their margins and shift the risks and problems of
development onto them (McIvor et al., 2006; Wasti and Liker, 1997). With these considerations, a
negative relationship between collaboration with suppliers and a manufactures capability to innovate
is possible for both parties (Koufteros et al., 2005) which highlights the need to understand how the
process is managed in successful collaborative engagement.

2.2. Collaborative management practices

Many management practices have been dened as important for collaborative development
success, such as developing a partner management approach through a company-wide strategy (van
Echtelt et al., 2008), promoting internal collaboration between departments (Hillebrand and Biemans,
2004), and formalizing selection and evaluation processes (van Echtelt et al., 2008). While suppliers
B. Langner, V.P. Seidel / J. Eng. Technol. Manage. 26 (2009) 114 3

technological capabilities are naturally crucial (McCutcheon et al., 1997), OEM rms product
engineers often perceive the suppliers cooperativeness as having at least as important an effect on
successful project outcomes (McCutcheon et al., 1997), highlighting the key importance of
relationships between partners on project outcomes (Handeld et al., 1999; Hoegl and Wagener,
2005). These relationships are proposed to need to be centered around familiarity and trust (Bruce
et al., 1995; Petersen et al., 2003).
A number of studies have emphasised the potential benets of involving suppliers early, such as in
the concept development phase (e.g. Takeishi, 2001), and have argued for the positive impact of higher
frequency and quality of communication (e.g. Littler et al., 1995; Ragatz et al., 1997; von Corswant and
Tunalv, 2002) throughout the process. However, the earliest phases of product development are
typically less predicable (Seidel, 2007; Veryzer, 1998) and so may provide more challenges in the
collaborative context.
Overall, despite insights into many aspects of collaborative development with a focus on rm-wide
arrangements (Cagliano et al., 2000), little is known of how the collaboration and joint work actually
occurs on a project level (Hoegl and Wagener, 2005). This is particularly true with respect to how
engagement may differ during different phases of development. While early supplier involvement and
participation in the concept stage is recognised as likely to be benecial, the actual process of
collaboration at this stage is relatively unexplored. This study sought to address the opportunity to
understand the collaborative process in more depth.

3. Research method

Qualitative research has particular strength in investigating topics which have not received sufcient
research attention (Maxwell, 2005), specically in relation to the investigation of processes. The
exploratory nature of the research suggested that rich data was needed to identify relevant factors,
making case studies an appropriate method (Edmondson and McManus, 2007; Stebbins, 2001). The
research was designed to look at two matched cases of collaborative concept development that would
each incorporate both OEM rm and supplier perspectives, and the cases involved the development of a
novel roof for a new model of convertible automobile. In each case an European OEM rm as well as
skilled suppliers specialising in convertible roof systems were involved in concept development.
Convertible roofs are a part of the car that has been traditionally developed and built by skilled
system suppliers. The fact that such structures and associated technologies are a key characteristic of
the respective car, and that they have a substantial interface with the rest of the vehicle, makes a close
collaboration between the OEM and the system supplier necessary. Therefore, it was an appropriate
domain for investigating the process of collaborative concept development. The two projects reected
a degree of market and technological uncertainty for the rms involved, and were considered more
than incremental advances. Both of the projects were completed and the convertible models
successfully launched to the market within the year of interviewing project participants. An overview
of the two cases is given in Table 1.

3.1. Projects investigated and data collected

LuxCar is an European automotive OEM rm which decided to extend its model range with a
convertible. As the initial knowledge base of LuxCar on convertible roof design was low, the rm had to

Table 1
Cases studied.

LuxCar project MidCar project

Objectives Develop soft-top roof and body for luxury Develop hard-top roof and body for mid-class
automobile automobile

Duration Approximately 4 years Approximately 6 years

Initial experience Low: rst convertible project for over 5 years High: substantial ongoing experience in convertible
projects with suppliers
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Table 2
Interviews conducted.

LuxCar project MidCar project

OEM interviews Vehicle project leader Vehicle project leader


Roof system module leader Roof system module leader
Head of engineering Head of engineering
Head of concept development
Lead engineer

Supplier interviews Supplier project leader Supplier project leader


Roof system module leader Roof system module leader
Chief design engineer
Head of engineering

rely substantially on support from specialist roof systems suppliers. LuxCar was required to use as
much carry-over content in the project from other vehicle programs as possible, and this limitation
made the development of the roof system a substantial challenge.
MidCar is an European automotive OEM rm that developed a new midrange convertible. For the
rst time it decided to develop a retractable hard-top instead of a soft-top convertible. Despite having
considerable experience with respect to soft-tops, the project represented a major challenge in terms
of part count and interface complexity with the rest of the vehicle.
Initial interviews were conducted with senior managers of the OEM rms, consisting of the head of
roof system engineering at MidCar and the project leader for the entire vehicle at LuxCar. In each of the
cases the senior managers were asked to identify the key actors involved with concept development
from both the supplier and OEM rm. Through very open access, seven different perspectives could be
gained for each case, including those of all project and roof module leaders, as summarized in Table 2.
Interviews lasted between 40 min and 2 h and were conducted in person and were transcribed.
Non-English language interview data were translated into English by a bilingual speaker as needed. In
addition to the interviews outlined above, follow-up phone interviews were done for both cases in
order to check ambiguous statements or to explore some areas that had become more important
during the analysis stage. Furthermore, the follow-up interviews were used to discuss the core ideas of
the model in order to validate them. Apart from being more focused in topics, these further discussions
were similar in length.
In analysing the cases the approaches suggested by Eisenhardt (1989) for case analysis and Langley
(1999) for developing process models were followed. After the initial interviews each of the two
concept development cases was examined individually. To do this the interviews were coded and a
number of themes in three distinct phases could be identied. In comparing the themes occurring in
each of the phases a process model could be inducted showing a set of common practices that were
mentioned by at least one of the participants in each of the cases. At the same time a number of
differences between the two cases were evident due to differences in initial domain specic
knowledge by the two participating OEM rms. Together this data allowed us to develop a model of
collaborative concept development and highlight differences based on initial level of experience.

4. The collaborative concept development process

The two projects were found to follow a common process of concept development, with three
distinct phases of activities as summarized in Table 3 and as described in the next section. The rst
exploratory stage, during which the concept is initiated and initial specications are drafted, was
dominated by OEM rm activities. This was followed by a competition phase in which the OEM rm
invites skilled suppliers to pursue concept development, with the aim to convince the OEM rm of their
technical concept for the roof, typically through the generation of a working model. In the nal phase of
engagement, the OEM rm and the chosen supplier for the rst time worked in a joint approach, as they
optimized the concept in preparation for nal development activities and production.
B. Langner, V.P. Seidel / J. Eng. Technol. Manage. 26 (2009) 114 5

Table 3
Summary of collaborative concept development activities.

Exploration phase Competition phase Engagement phase

Locus of activity OEM Suppliers Joint: OEM and chosen supplier

Primary concept Initial concept ideation Feature development Identication of target conicts
development activities Exploration of concept within specications Concept optimization
alternatives Development of
Primary concept selection working model
Specication setting

Despite similarities in the overall process, the rst two phases exhibited some signicant
differences due to the variation in the initial level of knowledge held by the two OEM rms with
respect to convertible roof design. MidCar started from a position of relatively high initial experience,
due to several decades of soft-top roof design and the employment of engineers that had previously
worked at suppliers specialising in this area. In contrast, LuxCar had very little initial experience, and
the impact of these differences will also be described.

4.1. An overview of the three phases

In this section we provide a further overview of the concept development activities undertaken by
both OEM rm and suppliers, illustrating how a concept went from initial idea to a concept to be
optimized into a nal product. As summarized in Table 3, the rst phase of collaborative concept
development, a phase of concept exploration by the OEM rm, was initiated with the creation of the
general concept idea. In the MidCar case the engineering department which held the responsibility for
convertible roof systems realised that a number of competitors were in the process of developing
retractable hard-tops, and, in the words of the head of engineering that there must be better concepts
for delivering hard-tops than there were at that point on the market.
While a recognition of a new convertible design was sparked by the presence of new hard-top
models, there was a rather broad exploration for what the concept would embody, as described by the
module leader for MidCar: In the early phase we explored a number of routes. Do we want a soft-top?
A hard-top? Will it be lightweight or normal? As will be described further in sections that follow, this
search was informed by some limited contact to suppliers, as well as reliance on the OEM rms own
market and technical scanning abilities.
This initial exploration occurred up to a point where the rst fundamental concept decisions were
taken at the senior level of the OEM rm. For the MidCar case the hard-top option was chosen by the
program head and his team, and in the LuxCar case the decision was taken at the CEO level. In each case,
an OEM project team then developed a rst broad concept based on their initial knowledge and the
requirements of the wider architecture of the vehicle, which formed an initial set of specications to pass
along to suppliers interested in competing for the opportunity to collaborate on the nal project.
In the competition phase, OEM rm specications formed the basis of and the boundaries for
concept development activities within supplier rms. While Krishnan and Ulrich (2001) emphasised
that in dening a concept both customer needs as well as engineering characteristics are determined,
at this point in the process the OEM rm has dened customer needs, and so the competition phase
focuses on achieving engineering specications. The suppliers in this phase developed the main
technical concept features like the kinematic system (describing how the convertible roof would
move) as well as making decisions on the materials used such as sheet metal or plastic.
This means that the components are not designed in every detail, rather they are designed on a
conceptual level to a point where the overall approach of the supplier is evident. In dening these
characteristics, the suppliers are responsible to a large extent for developing the product architecture
itself, such as what different components the roof consists of and how these are linked together. This
technical side of the concept needs to be proposed by the suppliers, as they may take on the
responsibility for later implementing the concept through detailed design and manufacturing.
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Overall, the roof concept was developed by the suppliers up to a point where an initial functional
model exists for the OEM rm to evaluate the suppliers abilities and match this to the OEM rms vision
for the concept. The module leader of the MidCar case described how important these models are:
One of the main variables in the competition was the lock concept...yet looking at [one
suppliers] concept for the lock system, which they had to present to us in a model, I knew
within three minutes that we would be working with [our ultimately chosen supplier...who]
had exactly understood what was needed. (Module Leader, MidCar OEM)
In the nal engagement phase, the OEM rm and supplier jointly rene and optimize the concept,
examining to what extent targets can be achieved or whether goal conicts exist. As illustrated in the
MidCar case, there can be problems even with the chosen suppliers execution of the concept:
After the competition you have the results of the chosen supplier, who. . .could not full the
interface requirements or some of the specications to some extentand thats where you then
start working. . .to improve and rene the concept to take it to its limits. (Head of Engineering,
MidCar OEM)
Further illustrating the changes that can be made to the concept and its implementation at this
later point, the chief design engineer of the chosen supplier to MidCar stated, My team had to change
the technical concept several times because of their insistence on design requirements. Design above
everything else!
Part of the reason for such a focus on concept optimization is due to the fact that not all interface
requirements were known at the outset. The project leader of the LuxCar supplier described this phase
as shaking the concept into place. He explained that while during the competition certain
performance targets are set, representing a fence in which we developed the concept, in the
engagement phase this fence was replaced by a white line, which we then negotiated with the OEM.
Overall, the initial concept is frequently modied in the last phase until an optimal solution which is
acceptable to both parties is found.

4.2. Knowledge transfer and integration practices in the exploration phase

To support the concept development activities outlined above, specic knowledge transfer and
integration practices were employed by the OEM rms to manage a process distributed between their
rm and several suppliers. The main practices observed at the rst phase are outlined in Table 4 and
relate to the exploratory activities of moving a concept from initial idea through to a set of
specications. For each practice in this table and those for the phases that follow, example evidence is

Table 4
Exploration phase: OEM knowledge transfer and integration practices.

LuxCar project example evidence MidCar project example evidence

Transfer practice: Source concept It was an internally-driven process, At the early phase you wont let a supplier
feasibility feedback while but we were pulling in some look at whats going on...but there are
maintaining distance and knowledge from various different issues you cant resolve without the
exibility specialist contractor [suppliers]. future suppliers. (Module leader,
(Lead engineer, LuxCar OEM) MidCar OEM)

Integration practice: Run What we had looked into was a We started a number of predevelopment
predevelopment projects retractable hardtop, but it quickly projects to get an initial idea of how a
to examine feasibility became evident that it would not retractable hardtop would look...
be a good package for the car... (Head of engineering, MidCar OEM)
(Head of concept development, LuxCar OEM)

Integration practice: Develop We put all our insights into the The documents are the knowledge
specications to enable documents which we gave to [the we have and the goals we want to
low-interaction competition suppliers] at the beginning of the achieve...if we have a radically new
competition. (Lead engineer, LuxCar OEM) product this is always the way.
(Module leader, MidCar OEM)
B. Langner, V.P. Seidel / J. Eng. Technol. Manage. 26 (2009) 114 7

given from both LuxCar and MidCar. While OEM rm evidence is usually featured in these tables,
supplier evidence agreed in each case with OEM rm evidence.
In the exploration phase the OEM rm was the main actor, and concept development was largely
internal to the rm. To support the activities of concept ideation and exploration of concept
alternatives, the OEM rm only maintained distant relations with suppliers. Overall it is an internal
thing, related the module leader of MidCar. This OEM rm practice, sourcing feasibility feedback from
suppliers, while at the same time maintaining distance, is outlined in the rst data row of Table 4 along
with associated evidence from each project. A key motivation for maintaining such distance from
suppliers is to maintain exibility with regards to both the concept and whom they want to work with
at later stages. The informal relations allowed the OEM project team members to talk to different
suppliers, probing initial ideas and thereby being exposed to a wide set of different opinions to form
the basis of initial concept decisions. As the module leader for MidCar related in the following
extended quote (a summary of which is in Table 4):
At the early phase you wont let a supplier look at what is going on [and] what decisions are
taken, but there are issues which you cannot resolve without the future suppliers, so you need
them for this information. For instance, we were planning of storing the hydraulic system in a
sensitive area of the car. So we had to ask the suppliers: Is that possible? (Module Leader,
MidCar OEM)

This practice of sourcing information while maintaining distance was also conrmed by the MidCar
supplier who was eventually chosen for the project, who related the different ways in which initial
probes might be used by OEM rms:
When the OEM has his rst own thoughts on the concept, he likes to ask us how we would
see the ideas [. . .] The OEM asks us to examine certain ideasthey do this with various
suppliers, also with new ones to check their performance[and] some of these investigations
are for more formal predevelopment projects, others are very informal. (Module Leader,
MidCar Supplier)
The second practice to highlight at this phase was the running of predevelopment projects to
examine the feasibility of concept alternatives. We classify this as a knowledge integration activity, as
it involves applying knowledge gained to-date and determining the limits of such an approach, an
important step in developing and codifying specications that will be passed along to potential
suppliers For MidCar this knowledge integration activity occurred in the form of a number of complex
predevelopment projects in which different ideas for realising a hard-top were examined:
These initial projects were for us our insight-building, and they formed the foundation for the
competition. One of the projects was too complex, one too simple, [and] in one of them the boot
space was too small. So our ideas evolved, and we concluded that in one conguration we have
the best styling, best package, and most robust overall system. (Head of Engineering, MidCar
OEM)

In the case of LuxCar there were also initial projects, but the scope of these projects was much less
complex and were focused on generating benchmarking targets as an outcome.
A nal practice in this earliest stage was the development of specications that would enable the
concept competition to be run with very low organizational interaction. The integration of knowledge
gained through the codication of targets in specications not only allowed later transfer of
knowledge to competing suppliers but also allowed the OEM rm to hide knowledge they did not
want to disclose, as illustrated in MidCar:
From early on we planned on developing a new safety system for the convertible that would
require a certain space in the back of the car. Consequently, we reserved a certain space which
we thought would be necessary in the package model that denes the available room...The
[Computer Aided Design] data was given to the suppliers specifying the room for their concept
roof without disclosing what we actually would do with this space. This was a way of hiding our
knowledge. (Module Leader, MidCar OEM)
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In summary, this rst phase of collaborative concept development was marked by OEM rm practices
that sourced limited information from suppliers, integrated knowledge gained through this sourcing
and associated predevelopment projects, guarded the OEM rms own protected knowledge, and
prepared the groundwork for a competition among suppliers.

4.3. Knowledge transfer and integration practices in the competition phase

The concept competition phase was led by supplier activities that used specications as a guide for
developing models of what the nal concept could achieve. In support of this supplier activity were
two primary knowledge transfer practices, as exercised by the OEM rm and as outlined in Table 5.
The rst practice to highlight, the establishment of low-interaction organizational arrangements,
was seen across both rms in how they related to the range of suppliers that were in contention for
working on the nal project. As the building and maintaining of strong tie relationships is associated
with costs (Hansen, 1999), this is avoided until a preferred partner is found. Rather than building up a
highly interactive communication system, all the communication in the MidCar case was with the
module leader during the competition. Related the head of engineering for MidCar, In this period
there were no questions of integration, the colleagues from the suppliers have their system
boundaries given by the specication provided. Such low-interaction arrangements have been
supported in previous research that illustrates how codiability, such as in the form of specication
documents, eases the transfer of knowledge (Zander and Kogut, 1995). Hansen (1999) showed that
weak ties are appropriate for knowledge transfer when the knowledge is not only codiable, but also
independent, and independence is achieved by separating the roof from the rest of the car through the
boundaries dened in the specications.
A second practice at this phase was the denition of specic feedback events. Both cases showed a
midpoint review as well as a nal presentation of results by the supplier to the OEM rm. For MidCar
this took the form of specic technical review meetings, but in between such meetings there was to be
very little contact. In LuxCar there were also dened points at which a review would be held and
feedback given. The MidCar case provides a good summary of how interaction worked during this
phase:
The supplier disappeared [after receiving the documents] for four weeks without any contact
with us whatsoever...After the four weeks they reappeared and proudly presented their rst
concept. Then we were quite amazed because they did an incredible job in four weeks, but the
concept still had some problems. They got some feedback on that and then they went back and
developed the concept for another couple of weeks. Subsequently, they presented a relatively
well thought-through concept. (Module Leader, MidCar OEM)
In summary, during this phase the OEM activities were primarily concerned with how knowledge
was transferred to the supplier for their own integration activities, and the organizational

Table 5
Competition phase: OEM knowledge transfer practices.

LuxCar project example evidence MidCar project example evidence

Transfer practice: Establish The Lead Engineer and the Module It is sort of like short-track running. Once the
low-interaction organizational Leader were predominantly in contact 100m runners have started you dont try to coach
arrangements with the competing rms. They them any longer...We give much less information
[alone] were responsible for bringing and have much less communication [after
information in-and-out providing specications]... (Module leader,
(Head of concept development, MidCar OEM)
LuxCar OEM)

Transfer practice: Dene specic We gave them a six or eight weeks We also had technical review meetings with
feedback events timeline with a midpoint review them where we gave them some feedback...
(Lead engineer, LuxCar OEM) for example [to tell them] with this lock
system you are still quite far away from
what we want. (Module leader, MidCar OEM)
B. Langner, V.P. Seidel / J. Eng. Technol. Manage. 26 (2009) 114 9

arrangements and structure of tasks was designed to provide for this division of activity. The suppliers
themselves were integrating new knowledge of the concept into their models, hoping to be chosen as
the preferred partner for the nal stage where true collaboration would begin in earnest.

4.4. Knowledge transfer and integration practices in the engagement phase

The primary concept development activities in the nal engagement phase were the identication
of target conicts and the optimization of the overall concept. In support of these broad joint activities,
there were four main knowledge transfer and integration practices exercised by the OEM rms, as set
out in Table 6.
The rst practice was the establishment of high-interaction organizational arrangements. For both
projects, one aspect of this was the establishment of one (LuxCar) or two (MidCar) on-site supplier
engineers at the OEM rm. In addition, both projects reported the use of team-building activities that
helped to facilitate the integration of the two organizations as they worked to understand how to
develop the nal product. Secondly, there was the related practice of working to create a joint
language between the two organizations. This nding was expressed in MidCar, which had more
experience, as much as it had been in LuxCar.
Third, there was specic integration of knowledge that had been collected in the competition
phase. This was the one nding that was expressed by the supplier interviews but not mentioned in
OEM rm interviews. Suppliers recalled being told how some of the OEM rms input to the nal
optimization of the concept was informed by input that came from other suppliers in the competition
stage. Finally, there were joint problem-solving and optimization practices. These practices included
using the resident engineers working alongside OEM engineers in developing the nal aspects of the
concept.
These knowledge transfer and integrations practices marked the point when collaboration
required new organizational structures and practices in order to reect the inherent challenges of
bringing together the domains of OEM rm and supplier expertise to the challenges of developing a
fully functional system. The process was at times messy and contentious, as the assumptions and
approaches taken by each actor did not necessarily t into that of the other as the roof system and
vehicle were meshed. This process of creative conict and pushing forward and back on
specications relied on the practices above to enable resolution of problems and an optimized
concept to be dened.

Table 6
Engagement phase: OEM knowledge transfer and integration practices.

LuxCar project example evidence MidCar project example evidence

Transfer practice: Establish We had a resident [supplier] Once the decision was taken for us
high-interaction organizational engineer who facilitated the as a partner, the interaction and
arrangements communication between us and exchange was much higher than
the various supplier engineers before (Module leader, MidCar
(Module leader, LuxCar OEM) supplier)

Transfer practice: Create joint We had to develop a language as A huge task was for the OEM and
language part of developing the relationships. supplier world to create and dene
I wrote a glossary of what I wanted a joint language and terminology
everything to be called in the roof (Module leader, MidCar OEM)
system (Module leader, LuxCar OEM)

Integration practice: Integrate The OEM said, Your competitor They suggested solutions which we
knowledge from competition phase did this, or did that. Did you think knew they had picked up from our
about this? (Project leader, competitors concept. (Chief design
LuxCar supplier) engineer, MidCar supplier)

Integration practice: Jointly Ideas would be coming from both This means also that the teams sat
problem-solve and optimize sides to solve the problem jointly at the CAD and tried to nd
(Module leader, LuxCar OEM) a solution... (Module leader, MidCar
OEM)
10 B. Langner, V.P. Seidel / J. Eng. Technol. Manage. 26 (2009) 114

4.5. Differences depending on initial experience

While the overall process was dened by common phases, some practices in the LuxCar project
differed from those at MidCar as a result of the differing initial experience levels of the OEM
organizations, as summarized in Table 7. While engaging in similar initial knowledge integration
practices, at LuxCar these were largely in the form of benchmarking of competitors cars, supporting
the acquisition of basic technological knowledge to set initial targets for the competition. As the
chosen supplier of LuxCar pointed out pointed out in working with LuxCar:
The predevelopment projects done by the OEM depend on their experience and knowledge of
roof systems. At that point in time their knowledge was relatively low, which limited their
ability for explorations. (Project Leader, LuxCar Supplier)
The difference in initial experience was also reected in the level of detail in corresponding
specications. While in the LuxCar case these were mostly targets, in the MidCar case the OEM rm
specied some specic technical details, like the number of roof shields for the hard-top. As their
module leader pointed out: We spent a lot of time initially to set the frame, the conditions to make
sure we receive a concept that suits us.
During the competition phase the relative differences reversed. In the case of LuxCar, there was more
involvement by the rm of suppliers, involvement to the extent that LuxCar decided to be exible on
some targets. Indeed, the module leader related that at the midpoint review, We changed some targets,
as for instance one of the suppliers could not package the roof in the car... LuxCar considered that the
concept specication is a uid document. It was never set in stone. It as seen more as a guideline. This
more uid competition process also took a relatively long time to manage, at over 6 months.
In contrast, MidCar treated the whole competition under a stricter 3 months timeline, which they
likened to short track running. MidCar was also very clear about the use of specications: The goals
were not and should not be modied during the competition. . . . You do give suppliers an indication
that they are too far from a specication, but otherwise modifying the goals in the competition is too
dangerous.
The nal engagement phase in both projects was similar, with this phase marking the time during
which collaboration began in earnest and organizational structures adapted to facilitate such
interaction.

Table 7
Summary of process differences between low and high initial experience projects.

Low Initial Experience High Initial Experience


(LuxCar) Project (MidCar) Project

Exploration phase
Relative involvement Lower: engagement with two Higher: used three suppliers to rene
of suppliers by OEM suppliers on general feasibility targets using detailed questions
questions

Relative detail of specications Lower: 12 broad targets and best Higher: main decisions on roof design
in class objective dened but specied and detailed CAD data generated
no detailed Computer-Aided
Design (CAD) data generated

Relative length of phase Shorter: only broad Longer: complex predevelopment


benchmarking as outcome projects completed

Competition phase
Relative involvement of Higher: interaction at midpoint Lower: distance to suppliers actively
suppliers by OEM of process to clarify and redene maintained by OEM
targets

Relative degree of Higher: targets redened as Lower: emphasis of OEM was to


specication change suppliers provided proposals keep concept stable

Relative length of phase Longer: more than 6 months Shorter: within 3 months
B. Langner, V.P. Seidel / J. Eng. Technol. Manage. 26 (2009) 114 11

5. Discussion

This study probed the means by which rms established both high and low-interaction
arrangements, while shifting the locus of knowledge integration between the OEM rm and suppliers
during collaborative concept development. The resulting process suggests several implications for
further studies and for managing in such distributed innovation contexts.

5.1. The changing locus of knowledge integration

By examining the practices described from a knowledge integration perspective, a number of


patterns become evident. Grant (1996) described how specialization of knowledge, such as between
OEM rms and suppliers, can be combined with the control over how knowledge is transferred and
integrated as a means to promote the creation of new innovations. In the initial phase of collaborative
concept development, the OEM is the main locus of knowledge integration, followed by the supplier in
the next phase, what Grant (1996) has described as integrating through sequencing. Different
specialist knowledge from either the OEM rm or supplier is integrated while minimising the cost of
knowledge transfer due to the stickiness of knowledge (von Hippel, 1994). The locus of innovation is
focused on the area where the knowledge for that particular problem resides, such as the OEM rm for
general vehicle constraints or the supplier for roof architecture expertise.
Grants (1996) notion of a second integrating mechanism, rules and directives, occurs in the form
of the specication that is passed to the suppliers. As the head of engineering for MidCar OEM related,
It was a constrained concept competition. . . suppliers developed the concept within the concept
frame given by us. Only in the last phase is knowledge integrated through group problem-solving.
This occurs in contexts of increased task complexity and uncertainty that outweigh the cost of
knowledge transfer (Grant, 2006), and the locus of innovation becomes the joint project team.
The means by which knowledge is integrated also relates to how knowledge is transferred and the
strength of relationship ties required. The search benets of weak ties (Hansen, 1999) are benecial
during early stages, when rst market and technical knowledge are integrated into concepts (Burchill
and Fine, 1997). During competition, codiability and independence are key criterion for easily
transferring knowledge between non-related groups (Zander and Kogut, 1995). Only in the last stage
of the concept development does the OEM rm intensify its collaborative relations with the chosen
supplier, at which time complex tacit information requires the formation of stronger tie relationships
(Leonard-Barton, 1992). Overall, we see how in managing the changing nature of OEM-supplier
relationships, both knowledge integration practices and knowledge transfer practices play a role in
moving a concept from idea to working system.

5.2. Implications and further research

The study of relationships between rms and suppliers has a long history in the automotive setting,
and this research sought to add to this body of knowledge by further focusing on those cases of joint
development of advanced engineering solutions from very early stages. We call attention to two main
implications of this study for managers from both automotive and non-automotive contexts seeking
to improve their ability to innovate through the use of skilled suppliers.
The rst implication is that the management of collaboration is also the management of distance.
The model we described supports the contention that early supplier involvement can indeed play an
important role early in product development (Bonaccorsi and Lipparini, 1994; McIvor et al., 2006), but
it also implies that rms may not wish to commit to a single partner early, but rather to use the early
informational benets of weak ties in order to gather as much knowledge as possible in the earliest
two stages. While managers from the automotive industry will be familiar with the need to attend to
selection processes in working with suppliers (van Echtelt et al., 2008), this model of collaborative
concept development shows how the concept development process itself can provide important
information in how to choose partnerships.
Some prior studies have emphasised the importance of increased communication in collaborative
product development (Littler et al., 1995; Ragatz et al., 1997) while others have suggested an inverted
12 B. Langner, V.P. Seidel / J. Eng. Technol. Manage. 26 (2009) 114

u-shape relationship (Hoegl and Wagener, 2005). The process model we present suggests that the
question should not be whether increased communication has a positive impact on collaborative
outcomes but rather at what time different types of communication is benecial. Indeed, our study
supports other studies that highlight how forms of collaboration differ depending on the phase of the
innovation process (Cagliano et al., 2000). Our ndings suggest that by probing early and codifying
knowledge gained, a wider variety of possible outcomes might be possible. In the LuxCar case, the
head of concept development phrased it that, we would have never realised that roof if we had
worked with only one supplier. While models of more collaborative approaches to innovation tend to
emphasise transparency and openness (Chesbrough, 2003; von Hippel, 2005), this study helps to
identify the benets of controlled knowledge ows when working with distributed sources of
innovation.
A second implication is that the process may need to be modied depending on the level of
experience the team has with the technology in question. In a rm working on a number of different
advanced projects, our research suggests that different timings in working through the stages may be
appropriate depending on the experience base of the team in question. For projects were there is little
experience, it may not be until the competition stage that targets can be fully appreciated (and
renegotiated), justifying the paradox of a faster initial exploratory stage for projects with less initial
knowledge.
Previous studies have largely investigated collaborative phenomena from either an OEM rm or a
supplier perspective, and with this study we wished to delve more deeply into the collaborative
process by exploring both sides of the relationship. While the approach we chose was designed to have
methodological t for the exploratory nature of this study (Edmondson and McManus, 2007), we
recognise the limitations of this approach. First of all, we selected successful cases to understand how
such processes might unfold under somewhat different starting points of experience. However, this
meant that the relative success of these collaborative approaches could not be compared with the
outcomes that might be seen if the OEM rm developed a system on their own. Future studies in the
automotive context could look at the adoption of various technologies with and without the use of
suppliers and under more wide-ranging number of suppliers engaged. As part of our research we
conduced additional interviews with project leaders from areas other than convertible design, such as
in the development of an innovative body component and a driver assistance system, and in such
projects a very similar pattern of collaboration with suppliers existed. Large sample studies in the
automotive context could use our model as a starting point for exploring the impact on the number of
suppliers used in competition, as well as the relative timing of when suppliers are engaged to compete
on new concepts.
Secondly, in line with prior research on collaborative product development (Kamath and Liker,
1990), it could be interesting to compare the European collaborative concept development process
with North American or Japanese cases. Japanese automotive rms have been recognised as
maintaining much stronger long-term relations and partnerships with their suppliers and to rely less
on competition (Clark, 1989; Morgan and Liker, 2006); there could be important differences based on
this differing cultural context.
Finally, in line with our interest in the implications this study has on other collaborative and more
open approaches to innovation, further research can explore how competitions are used in early
concept development activities in other industries. Where products developed have a more direct
consumer component, it could be important to consider how user information can be integrated into
such concept competitions (von Hippel, 2005) and how this might change the nature of knowledge
transfer and integration, an area that our research did not address specically.

6. Conclusion

Managers have long recognised that not all technological advances can come from within their
rms, but while the potential value of partnerships is compelling, insights into how such
collaborations work are still the object of much research. In support of this, a model of how rms
and suppliers jointly develop novel product concepts in the context of supplier concept competitions
has been presented, outlining how this process may differ depending on the OEM rms initial
B. Langner, V.P. Seidel / J. Eng. Technol. Manage. 26 (2009) 114 13

expertise. Although the aim is one of collaboration, only in the third phase, when one supplier is
chosen, do the OEM rm and supplier form strong ties and collaborate closely. Overall, the process
described reects the desire to combine efciency of organization with the use of a broad range of new
knowledge. Lessons from this investigation help us understand more about the changing nature of
knowledge transfer and integration practices behind distributed systems of innovation.

Acknowledgements

Support from the International Motor Vehicle Program, administered through The Wharton School
at the University of Pennsylvania and the Massachusetts Institute of Technology, is gratefully
acknowledged. This research was conducted while the rst author was a research student at Sad
Business School, University of Oxford.

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