Best Practices for New Product Development Management of Powertrain Components

Open Access
Author:
Decoste, Ryan
Area of Honors:
Supply Chain and Information Systems
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Ralph Howard Sees, Thesis Supervisor
  • John C Spychalski, Honors Advisor
Keywords:
  • Powertrain Components
  • New Product Development
  • Design Transparency
  • Cost Data Transparency
  • Supplier Embeddedness
  • Leveraging
Abstract:
The purpose of this research project is to outline the best practices for the management of powertrain components during a new product development project for an original equipment manufacturing firm. Research was conducted through an interview process with industry professionals maintaining experience as global procurement managers in an environment involving powertrain components. Concepts analyzed in the research process included engineering design transparency, cost data transparency, supplier embeddedness, and supplier network management. Through research, it is clear managers should reveal engineering design specifications and component characteristics early in the new product development process, but hesitate to reveal overall new product innovation and competitive advantage until a supplier is selected. Managers should also strive for cost transparency in terms of unique engineering features within the component to understand potential fluctuations in price, and develop a mutually benefitting cost savings platform. However, original equipment manufacturers should not concern themselves with evaluating a supplier’s embeddedness, but focus on the raw material indices relevant to the supply base. Overall, managers should maintain a small network of suppliers for each component within a powertrain system due to design complexity and the benefits of engineering design team familiarity with a supplier. In order to maximize profitability, establish a long-term supplier relationship, and successfully launch a new product, original equipment manufacturers should develop a strategy considering the best practices of engineering design transparency, cost data transparency, supplier embeddedness, and supplier network management for powertrain components.