Management of Technology and Innovation in Japan

Conclusion
Suppliers’ Involvement in New Product Development 247
Choosing a transaction dyad in the Japanese auto industry, we attempt to relate the
architectural attributes of auto parts and the patterns of supplier’s involvement in
new product development process. The high functional modularity of auto parts
which means the interfaces of auto parts’ functional parameters are well defined,
is shown to have positive relationship with the drawing-approved system, while
the low functional modularity of auto parts tends to make the auto maker to claim
the ownership of detailed design drawings of auto parts even when supplier has
high level design capability. We arrive at the conclusion that balance should be
secured between providing a high-powered incentive to a supplier, clearly defining
responsibility and coordinating costs, and the matching between architectural
attributes and the division of labor should be emphasized during the decision making
of design outsourcing.
The priority of functional consideration in the supply chain management in the
Japanese auto maker is also a conspicuous contrast with the practices by European
and American companies. Having emerged much earlier and developed into a systematic
practice, the delivery of functional modules with good design quality and
cost efficiency in the Japanese auto industry continues to be improved by incorporating
advanced integration technology and by optimizing the size of module. This
function oriented thinking of the Japanese auto maker is consistent with its stance
to construct a win-win relationship with suppliers and can be said as one source of
its competitiveness in the global automobile industry.
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