Unveiling the importance of being a preferred customer in order to develop innovations with suppliers

Purpose of the paper and literature addressed: The purpose of this research is to understand why early supplier integration in new product development repeatedly fails and how to select the right suppliers to avoid supplier obstructionism. We review the literature on early supplier integration. Research method: We conducted a consortial benchmarking study, involving seven firms as part of the research consortium and benchmarking visits to six best-practice firms. Research findings: Literature was distinguishing between operational and relational criteria explaining success (or failure) in buyer-supplier collaboration in innovation processes. Our research suggests that the direct relationship may be moderated by a strategic dimension. Missing buyer attractiveness for suppliers may be one additional explanation for the high rate of supplier obstructionism in such collaborations. As a consequence, a buying firm may want to become a preferred customer of its key suppliers. This can be achieved through concentration of the purchasing volume or selection of smaller suppliers. Main contribution: The notion of the buyer becoming a preferred customer of its suppliers effectively inverts the classical marketing approach. This change of perspective opens the avenue for a whole series of future inquiries, in particular answering the question on how to become a preferred customer.