Assign 4 Group 10

Chapter 11 Question 6
What are the benefits and costs of involving customers and suppliers in the development process?
In a new product development process, to achieve success, there are three goals need to be fulfilled: 1) maximizing the fit with customer requirements, 2) minimizing the development cycle time, 3) controlling development cost.
Many products fail to earn an economic return due to the missing of these goals. Thus involving customers and suppliers in the development process can be a good way to reduce such problem.
Involving customers in a product development team or a design process can help the firm to have a clear view of which product features customers value the most and shorten the development cycle. Some firms use the “beta testing” in the early development stage to get feedback on their product and some companies introduce
“lead users” method to identify future trends of general customers. Then the company can stay focus on projects that better meet the customer’s need, resulting more successful projects that bringing successful economic return
Also firms can make adjustment on their expectation of new product’s pricing by involving customer to avoid products that are too expensive to gain market penetration. Relying on customers may brings some negative influence. Customers often feel like to make incremental enhancement to the current products instead of encouraging radical innovations. It takes time and money to find the most suitable customers to be involved and to filter all the collect feedbacks, the total cost will increase.
Involving suppliers is another important way for product improvement and development efficiency. Suppliers can provide additional source of information and ideas that suggest an alternative input, this may reduce cost or time to market but achieve same functionality. Integrated with suppliers