New Product Development in an Emerging Economy: Analysing the Role of Supplier Involvement Practices by Using Bayesian Markov Chain Monte Carlo Technique
The research question is whether the positive relationship found between supplier involvement practices and new product development performances in developed economies also holds in emerging economies. The role of supplier involvement practices in new product development performance is yet to be substantially investigated in the emerging economies (other than China). This premise was examined by distributing a survey instrument (Jayaram’s (2008) published survey instrument that has been utilised in developed economies) to Malaysian manufacturing companies. To gauge the relationship between the supplier involvement practices and new product development (NPD) project performance of 146 companies, structural equation modelling was adopted. Our findings prove that supplier involvement practices have a significant positive impact on NPD project performance in an emerging economy with respect to quality objectives, design objectives, cost objectives, and “time-to-market” objectives. Further analysis using the Bayesian Markov Chain Monte Carlo algorithm, yielding a more credible and feasible differentiation, confirmed these results (even in the case of an emerging economy) and indicated that these practices have a 28% impact on variance of NPD project performance. This considerable effect implies that supplier involvement is a must have, although further research is needed to identify the contingencies for its practices. 1. Introduction The drive to improve product development efficiency and effectiveness, as well as to utilise suppliers’ technological capabilities, is the main motive for early supplier involvement [1]. The importance of early supplier involvement, or supplier integration into new product development (NPD), has been emphasised in various research works [1–13]. Previous studies have revealed that supplier integration leads to significant improvements in NPD processes in terms of development time, cost, and quality [2, 6–8, 14–16]. For example, Cousineau et al. [17] reported that implementation of supplier integration in product development led to positive results such as enabling the supplier to meet the required timeline, providing the supplier better knowledge of the customer’s needs, and enhancing customer-supplier relationships. Hence, there is little doubt that supplier involvement during NPD is beneficial for time-to-market, quality, and cost. Although the empirical evidence found by previous studies indicates that supplier involvement leads to positive outcomes in terms of new product development performance, that finding is not
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