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This book examines key issues, challenges, opportunities and trends in innovation processes and supply chain management. It proposes ways for organizations to improve their performance by developing business strategies, establishing business innovation activities, and aligning business and innovation activities among firms. Further, it showcases and analyzes the implementation of inter- and intra-organizational process improvement activities and the implementation of organizational innovation solutions to address new product and process-related collaborative relationships across the supply chain. The book is useful for researchers, academics and professionals, presenting some of the most advanced research, concepts, and case studies on the relationship between innovation and supply chain.



Innovation and Supply Chain Management


The Intellectual Structure of the Relationship Between Innovation and Supply Chain Management

Innovation is recognised as an important source of competitive advantage by both academics and managers. Nowadays, supply chain partners play a crucial part in driving many aspects of innovation, from the definition of the product concept to the launch to the market. This chapter analyzes how the relationship between supply chain management and the innovation process is addressed in the literature and discuss ways to improve the performance by means of this relationship. A bibliometric analysis—including citation and co-citation analysis—is carried out to study the intellectual structure of the topic. In the end, four literature clusters were identified, and their characteristics are discussed.

Ricardo A. Zimmermann, Luís Miguel D. F. Ferreira, António Carrizo Moreira

The Importance of Supplier-Client Relationships


Coordination of New Product Development and Supply Chain Management

New product development (NPD) and supply chain management (SCM) enable companies to respond to new demands in a responsive manner. The scarcity of research addressing the coordination of NPD and SCM is notable. The purpose of this research is to identify and examine linkages between NPD and SCM through a case study that includes a Swedish furniture wholesaler. Several linkages that stress the need of using an integrative NPD process where the design functions are aligned with other main functions of the company were identified. For example, it was observed that a strong focus on the demand side (NPD) has induced high demands on the supply side (SCM) of the case company. Therefore, the NPD process to a larger extend needs to incorporate main supply functions and other sales-related functions that support the commercialization of the product. This promises to create a consumer-oriented business, especially needed in markets where products have short life cycles and where having a short time to market is crucial. Within future research, it will be interesting to expand this research to companies that operate in different markets and/or have different objectives and to provide an inclusive description of the consumer-oriented business model.

Per Hilletofth, Ewout Reitsma, David Eriksson

An Investigation of Contextual Influences on Innovation in Complex Projects

There is paucity of literature on supplier-enabled-innovation in complex project-contexts. Based on literature from repetitive-manufacturing-contexts, this conceptual chapter identifies innovation-fostering-practices and develops a conceptual-framework relating them to innovation-performance. The framework suggests that new knowledge is the basis of innovation and leveraging knowledge from the supply-network is a key element along with absorptive-capacity and R&D-investment in creating new knowledge. New knowledge, however, must be exploited to create innovative new products and successfully commercialized. Suppliers can play an important role in ensuring successful exploitation of new knowledge. We posit that innovation-fostering-practices mediate the exploitation of new knowledge into superior innovation-performance. Thus, the proposed conceptual-framework incorporates the exploration and exploitation-aspects of innovation. Since contextual-differences can play a major role in the efficacy of these innovation-practices, our conceptual-framework might not fit complex project-environments in its entirety. To better understand the contextual-influences in complex projects, we evaluate the applicability of theoretical arguments from repetitive-manufacturing literature and our conceptual-framework to complex project-environments. The chapter utilizes a qualitative study to carry out this assessment. The results, while pointing to the usefulness of our framework and the innovation-fostering-practices, highlight the influence of the contextual-factors in complex projects. We develop practically useful conclusions for leveraging the supply-base for enhancing innovation in complex projects.

Lone Kavin, Ram Narasimhan

Necessary Governing Practices for the Success (and Failure) of Client-Supplier Innovation Cooperation

This chapter aims to empirically identify governance practices that are critical for the success of client-supplier innovation cooperation. To do so, we use Necessary Condition Analysis (NCA) to screen a large panel of contractual provisions and coordination practices that are theoretically recognized as influencing relationship performance. Based on survey data describing 160 client-supplier relationships on an innovation project, we empirically determine which of these practices are conducive to highest or lowest performing relationship performance. We identify 12 practices—including the necessity of considering a client/supplier as a key account, and regular involvement of the client’s purchasing function—that are critical for creating a high-performing relationship, and 12 that lead to a low-performing relationship—that is, those that should be avoided. Our results provide deeper knowledge of the governance of client-supplier innovation cooperation, thanks to the paradigm change driven by the NCA approach. They also provide direct practical implications: practices to promote or to avoid in order to maximize successful innovation cooperation.

Romaric Servajean-Hilst

Collaborative New Product Development in SMEs and Large Industrial Firms: Relationships Upstream and Downstream in the Supply Chain

The aim of this chapter is to compare collaborative new product development (CNPD) established by industrial companies with their suppliers and customers, according to their size and the type of innovation generated. To do so, eight in-depth case studies were analyzed, based on semi-structured interviews. The findings show that CNPD with suppliers in more active than with clients. The results also show that firm size is important in CNPD activities namely when product differentiation and large scale production activities are at stake. From another perspective, the results show that the development of processes and management methodologies in upstream activities are not extensively used. The chapter contributes to knowledge about CNPD by comparing how upstream and downstream are affected based on firm size and the type of innovation generated.

Filipe Silva, António Carrizo Moreira

It’s Time to Include Suppliers in the Product Innovation Charter (PIC)

The role of supply chain relationships in innovation is being recognized and researched increasingly in recent times. However, the focal buying firm that is trying to innovate for New Product Development (NPD) does not seem to have specific guidelines on how and when to involve suppliers in innovation. The Product Innovation Charter (PIC) is the mission statement of innovation that can offer guidelines to the managers in the buying organization about how and when to involve suppliers in innovation. The chapter explains the PIC and builds the argument that suppliers need to be explicitly mentioned. Such mention should consider the role and capability of new and existing suppliers for innovation that is radical or incremental, early stage versus later stage NPD while defending the intellectual property of the innovating focal organization. Guidelines for mentioning the supplier in the PIC are offered.

Subroto Roy

Mission Impossible: How to Make Early Supplier Involvement Work in New Product Development?

Innovation is paramount to survive in today’s rapidly changing world. Developing and marketing new technologies, solutions and products successfully requires the concerted actions of many stakeholders in global value chains. Large companies have embraced the idea of open innovation. They realize that in order to speed up development and reduce risk, they need to collaborate with supply and knowledge partners. However, mobilizing partner specialist knowledge seems problematic. Academic research demonstrates contrasting results. In some cases, supplier collaboration in new product development i.e. early supplier involvement may create large benefits. In other cases, it may lead to detrimental and even devastating results. This chapter discusses why these contrasting results are found. It draws on over 30 years of academic research, that was conducted and/or supervised by the author. The chapter concludes that, as the drivers and enablers of early supplier involvement today are clear, fostering effective human interaction aimed at sensitive knowledge and information exchange on behalf of organizations with conflicting interests is crucial in early supplier involvement. As the human factor in technology driven organizations is often undervalued, more research is needed to understand how to mobilize interorganizational knowledge sharing in such exchanges.

Arjan J. van Weele

Strategies and Implications for Innovation


Purchasing Involvement in Discontinuous Innovation: An Emerging Research Agenda

Building on a systematic review of the literature, we define and discuss why and how purchasing needs to be involved in the discontinuous innovation process. We argue that purchasing involvement in NPD should be considered mainly when the customer firm faces discontinuous innovation. Seeking to promote this emerging research agenda, we present three propositions to focus future studies and inspire practices: (a) technology sourcing and scanning out of the boundary of the supply base is an important stake to support discontinuous innovation as (b) to form an ambidextrous purchasing organization and (c) to develop absorptive capacity within purchasing function. The paper concludes by summarizing the conceptual implications of the paper, outlining some initial managerial recommendations.

Richard Calvi, Thomas Johnsen, Katia Picaud Bello

National Culture as an Antecedent for Information Sharing in Supply Chains: A Study of Manufacturing Companies in OECD Countries

The chapter investigates the importance that differences in national culture characteristics have in explaining the investment that companies do in collaboration with their supply chain partners. Empirical analysis is based on the fifth round of the International Manufacturing Strategy Survey (IMSS V), through which have been gathered data among 392 companies belonging to 16 Organization for Economic Cooperation and Development (OECD) economies. Two specific cultural traits have been considered: individualism-collectivism and power distance. Results prove evidence of significant and complex relationship between the mentioned cultural characteristics and the amount of investment that a focal company is willing to develop in information sharing with its supply chain partners.

Ruggero Golini, Andrea Mazzoleni, Matteo Kalchschmidt

Risk Allocation, Supplier Development and Product Innovation in Automotive Supply Chains: A Study of Nissan Europe

As new technologies and globalization change the vertical contracting structure of the auto industry, risk allocation in OEM-supplier relationships remain critical to ensure innovation and competitiveness. Developing previous, agency theory based research on the levels and the determinants of risk sharing, this study of Nissan Europe’s supply chain shows that the OEM absorbs more risk (a) the greater the supplier’s environmental uncertainty, (b) the more risk averse the supplier, and (c) the less severe the supplier’s moral hazard. The study also shows that Nissan, though still absorbing risk from their suppliers to a nonnegligible degree, has moved to a more market-based approach to supplier selection and development as a consequence of technological change, the industry globalization and the merger with Renault.

Arnaldo Camuffo

Does Supply Chain Innovation Pay Off?

The purpose of this chapter is to investigate the relationship among supply chain innovation and performance in terms of market and operational performance. The chapter is built on empirically data subject to 187 useable responses from a questionnaire-survey among Danish manufacturers. A conceptual model was developed and subsequently two major hypotheses were formulated. Linear regression was performed using SPSS software 22.0 to tests the developed hypotheses. Supply chain innovation is unfolded through the components of business processes, networks structure and technology. Data reveals that supply chain innovation does pay off in terms of improved market and operational performance. The chapter also reveals that the strongest relationship is obtained with supply chain innovation and operational performance. Market performance may be influenced by a number of different factors beyond supply chain innovation. The chapter provides interesting findings of the network component with empirical evidence that it has a positive influence on both market and operation performance. The chapter concludes by suggesting new areas of research including also the relationship to financial performance.

Jan Stentoft, Christopher Rajkumar

Information and Technology


Technological Innovations: Impacts on Supply Chains

Supply chains have benefitted tremendously from digital and transportation technologies over the years. Advanced IT systems have enhanced inventory and demand visibility and facilitated communications with global partners and customers, while transportation technologies have improved the speed and efficiency necessary to transport goods globally. However, dramatic changes in both of these areas are on the horizon. The emergence of new technologies such as 3D printing, virtual reality, autonomous vehicles, drones, and the Internet of Things (IoT) will force the next big wave of changes in global supply chains. While some of these technologies have been adopted by individual firms, many questions remain concerning how these technologies will drive new supply chain policies, business models, and regulations in the future. To illustrate, while technologies such as autonomous vehicles and IoT facilitate supply chain efficiency and transparency, they also increase the risk of compromising data security. In this chapter, we offer a brief overview of each of these emerging technologies and summarize the impact on the supply chain. We intend for this chapter to spur interest and research into not only these technologies and their impact on supply chains, but also into envisioning the supply chains of the future.

Cheryl Druehl, Janice Carrillo, Juliana Hsuan

The Role of Informational and Human Resource Capabilities for Enabling Diffusion of Big Data and Predictive Analytics and Ensuing Performance

Big data and predictive analytics, or BDPA, has received great attention in terms of its role in making business decisions. However, current knowledge on BDPA regarding how it might link organizational capabilities and organizational performance remains unclear. Even more linted is knowledge regarding how human resources (HR) might also work to support this linkage. Drawing from the resource-based view, this chapter proposes a model to examine how information technology deployment (i.e., strategic information technology flexibility, business-BDPA partnership and business-BDPA alignment) and HR capabilities affect organizational performance through BDPA. Survey data from 159 Indian firms show that BDPA diffusion mediates the influence of IT deployment and HR capabilities on organizational performance. In addition, there is a direct effect of IT deployment and HR capabilities on BDPA diffusion, which also has a direct relationship with organizational performance. The findings suggest the important of HR capabilities, which are often overlooked in the quest for more and better technology situations. Informational capabilities are also shown to play an important role in diffusing BDPA, and driving subsequent performance.

Deepa Mishra, Zongwei Luo, Benjamin T. Hazen

Adoption of Industry 4.0 Technologies in Supply Chains

The widespread use of internet is changing the way supply chain echelons interact with each other in order to respond to increasing customer requests of personalized products and services. Companies acquainted with the concept of industry 4.0 (i4.0) embrace the use of internet to improve their internal and external processes, delivering the dynamic and flexible response customers want. This chapter aims to discuss how supply chains may benefit from the adoption of i4.0 technologies by their partners and highlights some of its implementation challenges. Eight technologies cover most of i4.0 applications: additive manufacturing; big data & analytics; cloud computing; cyber-physical systems; cyber security; internet of things; collaborative robotics; and visual computing. At individual level, technologies such as additive manufacturing, collaborative robots, visual computing and cyber-physical systems establish the connectivity of a certain company. However, the integration of the whole supply chain, based on the principles of i4.0, demands that information provided by each company (Big Data) is shared through a collaborative system based on Cloud Computing and Internet of Things technologies. To safely share useful information, Cyber Security techniques must be implemented in individual systems and cloud solutions. Summing up, even though the adoption of i4.0 demands an individual initiative, it will only raise the supply chain’s competitive advantage if all companies adapt their manufacturing and supply chain processes. The main advantage foreseen here is based on an improved communication system of the whole supply chain, bringing consumers closer to the production process.

Gustavo Dalmarco, Ana Cristina Barros

Advanced Supply Chains: Visibility, Blockchain and Human Behaviour

Technological advances over the last decade saw the rise of ICT and IoT, paving the way for the Supply Chain of Things. Blockchain technology was one of the most recent and potentially most significant developments. Blockchain technology are secure by design and can enable decentralization and visibility, with application in cryptocurrency transactions, historical records, identity management, traceability, authentication, and many others. However, successful adoption of such technology requires that the people, process and technology are ready. We propose a conceptual framework where the concept and technology can balance between positive and negative manifestations depending on human behavior, therefore determining the success of Blockchain technology application in supply chains. While both the concept and technology are relatively ready, human behavior is a challenge as it is known that people suffer from habits and perform poorly when exposed to large volumes of data. Therefore, the development of advanced supply chains with much greater visibility enabled by Blockchain technology must take into consideration people in order to succeed.

Alexander Kharlamov, Glenn Parry
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