Balanced relationships: management of client-supplier relationships in product development

In strongly competing markets, such as the automotive industry, collaboration between clients (e.g., OEM) and suppliers is changing. Ford and Chrysler are examples of companies that no longer consider suppliers as mere component producers, but as partners in the creation of innovative products. Clients outsource not only production of parts to suppliers, but also the development of parts and increasingly the development of complete (sub)systems. Collaboration in product development between client and supplier is becoming more and more important. Management of collaboration is, however, extremely complex given the number of unsuccessful collaborative efforts. Apparently, problems in managing collaboration are different from the problems managers are used to encountering. However, little is known yet about the problems in collaborative projects between clients and suppliers. In this paper, a number of problems in collaborative projects will be identified. The paper is based on case studies in three Dutch companies involved in changing client¿supplier relationships.