What is the role of supply management on the product development and design process?

Question

What will be an ideal response?

Answer 1

Approximately 85 percent of an item or service's cost is determined in the design stage. This, combined with the fact that purchased goods and services make up more than 50 percent of a firm's cost of goods sold, means that supply managers need to maximize the effect he or she can have on the cost and quality of the materials and service procured, and thus the manager must be involved in the design and development process.
Before supply managers can add value to the development and design process, however, they must be aware of what the supply base is capable of providing. As supply managers become familiar with the supply base and take time to investigate ongoing innovations, they may find applicable capabilities beyond their expectations.
Armed with knowledge of supplier capabilities, supply managers who are involved in new product design can contribute in many ways. They can suggest component parts that are already used in another product within the firm, or they can find a lower-cost or higher quality component during the design stage. Supply managers can also facilitate early supplier involvement in the design process, which has been found to help reduce cost, reduce concept-to-customer development time, improve quality, and provide innovative technologies that can help capture market share. Although there are many possible supplier integration points in the new product development process, world-class companies are maximizing the benefits of early supplier involvement by forming cross-functional design teams and involving suppliers at the earliest stages of development.