The impact of global sourcing in new product development processes

Abstract

This study investigates which product characteristics and sourcing location conditions (global or local) support efficient supplier integration in New Product Development (NPD) processes. A research model is suggested to analyse the relationship between procurement product characteristics, buyer-supplier project organisation and NPD results. Moreover, the moderating impact of the geographical sourcing location on the causal relationships in the model is assessed. Data from 209 research-intensive firms in German-speaking countries were used to test the research hypotheses using structural equation modelling. The findings propose that the complexity and importance of the product procured are crucial to the form of project organisation between the parties. Buyers and suppliers tend to collaborate to a greater extent when the complexity and importance of the procurement object are high. Collaborative project organisation influences the result of NPD, and this relationship is more effective when a local supplier is involved in the process.