Implementing Open Innovation Alliances

Outsourcing Development & Life-Cycle Management

The challenge for Original Equipment Manufacturers (OEMs) is the need to continually develop and market innovative products in the shortest possible time.

For complex products, this requires a broad set of technical skills, which often span multiple disciplines. Often only a few of these technical competencies form the key to a distinctive position in the market: the core competencies.

The development and maintenance of non-core competencies in a competitive manner can be a significant and sometimes even risky undertaking. Outsourcing (part of) the development of an OEM’s product then provides a possible solution.

Such outsourcing does create a significant dependence. The way in which a product is developed is almost by definition unique, whereby changing supplier becomes riskier and more expensive than with other types of outsourcing.

Moreover, such outsourcing can have an impact on virtually all disciplines and departments within the OEM’s organization. All this makes the implementation of such an outsourcing complex. The result however can be very rewarding!

Elekta

Competes in the area of life sciences, specially the treatment of cancer and brain disorders, and outsources the less differentiating system modules with relatively long product lifecycles.

PhenomWorld

Once a start-up with innovative electron microscopy technology, but without a development department that could achieve the necessary quick introduction to the market.

About the book

Over the last few decades, we have seen the development of open supply chains for production. These supply chains are now quite mature in terms of balanced relationships between OEMs and suppliers, as well as in terms of the associated business models and ways of working. The expectation over the next few decades is that we will begin to see a similar development towards open supply chains for Development and Life-cycle Management (D&LCM).

About Wim Steenbergen

Wim Steenbergen is an MScEE and MBA with a 20-year track record in innovation strategy and implementation for high-tech products at global original equipment manufacturers (AT&T, Philips and Ericsson). He has held positions in which he managed profit and loss, product development, and marketing programmes for both B2B and B2C products in Europe and the USA.