ABSTRACT
This chapter identifies the rationale for early supplier involvement (ESI) and early purchasing involvement (EPI) in new product development (NPD), exploring success factors and best practice. It applies an NPD process framework of ESI and a model to evaluate the extent of ESI in companies. As part of this process, it discusses the concepts of design for environment and design for sustainability, explaining purchasing’s role in discontinuous innovation and the challenges of this form of innovation. Chapter 7 also considers process innovation by discussing how information communication technology is used to improve the purchasing and supply process. We begin by discussing the impact of early electronic data interchange systems in terms of improving basic transaction efficiency through speed and standardized communication between firms. We then move on to the role of electronic procurement and how by incorporating the Internet it connects the whole enterprise. Specific tools such as collaborative hubs and electronic auctions from the 2000s onwards revolutionized the way buyers and suppliers worked together. An era dominated by the digital supply chain has now emerged, with the number of fixed and portable computing devices rising exponentially in the past decade. Individual devices increasingly contain communicating sensors which, when linked together, create a computing intelligence that is called the Internet of Things. The application of the Internet in the business environment means there are also rising expectations around the digital operational capabilities required of suppliers, e.g. their ability to engage in real-time communication between supply chain members, create interlocking databases and have 24-hour shipment tracking. Widespread digital application in diverse areas such as social media, reverse logistics and ‘smart cities’ means that the use of digital technologies has become an essential element in the PSM professional’s toolkit. The disruptive nature of promising new technologies such as additive manufacturing or 3D printing is also discussed, with the capability to produce complex 3D components with flexible machines using digitally controlled laser technology. The chapter concludes with how digital technology has become an enabler for sustainable supply chains, using the example of business-to-business online collaborative sharing sites (e.g. hubs, portals) for supply chain environmental, social and safety compliance and auditing.
