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).
Outsourcing D&LCM involves three challenges. First, outsourcing development requires the Original Equipment Manufacturer (OEM) and the supplier to agree on fair risk-reward schemes for the risks associated with innovation, including technology risks, warranty on design, and intellectual property. After outsourcing development, outsourcing life-cycle management – the second challenge – is often a relatively small step, but its implications are significant, as it will impact virtually all disciplines in both organizations. So again compensation and risk-reward schemes are required, in order to create a win-win situation for both parties. The third challenge, managing the cooperation between OEM and supplier, can easily become as complex as managing an alliance between companies, requiring great strategic alignment, a high level of operational integration, and comprehensive contracts.
This book is a practical guide for OEMs and suppliers to manage their relationship in this specific type of alliance, from its first development project right through to its full implementation. It introduces the subjects and terminology relevant for this type of cooperation in a way that all involved disciplines will (need to) understand it, including product management, development, operations, service, sales, purchasing, and legal. Then it presents a step-by-step plan to implement and manage the cooperation, with many practical tools and real-life examples. This book’s in-depth, multidisciplinary approach makes it an ideal general management tool for innovation managers, especially those in the high-tech industry, who are considering outsourcing part of their development.
You can order the book at your (online) bookstore. ISBN : 978-94-6345-100-0
The table of contents of the book and a preview can be found here.
“Over the last decade, NTS has gone through a development from a build-to-print supplier to a co-developing partner of its OEM customers. This has proved to be a complicated trajectory. Wim Steenbergen has used the experience of his work at NTS to write this much recommended guide on the challenges involved in this change in relationship and how to deal with them.”
This book contains a lot of ‘wisdom and experience’ on innovation alliances. Of all the books on innovation alliances, this one gives clear, concrete direction to senior leaders and innovation managers on what to do and what not to do when contemplating collaboration with development partners. As such it is a helpful, easy-to-read and pragmatic guide.
“Steenbergen demonstrates impressively that disruptive innovation should be approached systematically, building on shared knowledge and technological expertise. This book gives a holistic view on outsourcing development and life-cycle management and provides valuable strategy recommendations for decision makers in the innovation process to establish successful collaborations”
“Suppliers are changing more and more from capacity supplier to knowledge providers responsible for the design of a component or module. This shift in the value chain requires practical knowledge for it to be successful. This book provides that knowledge. The author has a lot of experience in these transitions and I can recommend this book wholeheartedly.”
“In an increasingly interconnected world, managing supply chains is more critical than ever. In ‘Outsourcing Development and Life-cycle Management’, Steenbergen conveys stimulating and fresh insights, and provides a comprehensive toolkit for managers and innovation leaders, both on the OEM and supplier sides.”
“We have been on the journey of outsourcing design and life-cycle management for a number of years, starting with non-core, low-level design before moving to outsourcing full design, manufacture and lifecycle management of key product modules. Steenbergen’s end-to-end, step-by-step practical guide to transitioning to D&LCM would have been a great benefit to our corporation at the start of our journey, but it also highlights where we still have opportunities to improve.”