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How does Early Supplier Involvement (ESI) timing affect development costs

Basi, D. (2015) How does Early Supplier Involvement (ESI) timing affect development costs.

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Abstract:Despite the fact that a great deal of quantitative and cross-sectional research has been done about the relationship between supplier involvement timing and development costs, little emphasis is put on explaining how Early Supplier Involvement (ESI) timing affects development costs. The aim of this paper is to get a better understanding of the relationship between ESI timing and development costs, provide a more fine-grained understanding, come up with alternative explanations, and identify potential modifying conditions. To achieve this, a qualitative cross-sectional case study has been conducted. This qualitative research suggests that development costs are positively affected by (1) suppliers’ information and expertise, (2) suppliers’ know-how about production possibilities, (3) the fact that suppliers can recognize problems early on in the new development process, and (4) that suppliers can identify opportunities to reduce costs, however only when suppliers are willing to share the benefits of the savings. Additionally, the research also suggests that ESI could increase development costs when a customer heavily depends on the supplier and the suppliers can increase its prices knowing that the customer will more or less accept it.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/67431
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