Managing Knowledge Exchange and Supplier Selection in a Product Technology Transfer

Abstract

In an ever more interconnected and integrated world, supply chains are undergoing continuous radical redesigns triggering in turn transfers of products and technologies between suppliers across the globe. This multi-year, cross-functional process, referred to as product technology transfer is determinant for the success or failure of a supply chain redesign and involves three stakeholders: the focal company, the sending site and the receiving site. The focal company is the initiator and leader of the process and owns the products to be transferred. The sending site is the current manufacturer, knowledgeable about products, technologies and processes. Finally, the receiving site is the future manufacturer of the object of the transfer. The product technology transfer successful completion depends on the outcome of three subsequent phases: pre-transfer, implementation and launch. The first one includes the processes for knowledge exchange and supplier selection. The sending site shares with the focal company the knowledge on the products in the scope of the transfer. Moreover, the focal company selects the receiving site among a set of candidate suppliers and distributes to this new manufacturing plant the acquired knowledge. During the second phase, the receiving site implements the transfer in a process supported by the focal company. Finally, in the third phase, the receiving site ramps-up the production and starts distributing the products to the market: the transfer is complete. This thesis project intent is to deliver a manual aimed at supporting practitioners in handling the pre-transfer phase of product technology transfers. The manual tackles the procedures for both knowledge exchange and supplier selection, the two intertwined groups of activities which precede the implementation of the transfer. Overall, the recommendations, guidelines and tools provided answer the following research question: “How can companies effectively design the pre-transfer of a portfolio of products and their technologies?” The manual has been developed through participation in several product technology transfers within a single company at different stages in their lifecycle. Crucial have been observations, brainstorming sessions, workshops, and prototypes development and testing. The early stages of this thesis project have focused on the situation analysis, including the processes of ideation, objectives discovery, stakeholder analysis and requirements identification. Subsequently, the process entered the design phase, which has been divided into three steps: conceptual design, preliminary design and detailed design. Throughout, the approach has changed from descriptive to prescriptive and from simplified to elaborated. Finally, the manual has been validated. It has been discovered that knowledge exchange is exceptionally challenging because the market for knowledge is imperfect. Indeed, knowledge is partly tacit and often perceived as complex and new. Furthermore, organisational, physical, cultural and normative distances between the parties involved in the transfer pose a real challenge to an adequate knowledge flow, especially for international transfers. Acknowledging these factors, the manual provides recommendations to improve the effectiveness of the knowledge exchange. Practitioners need to focus on experience, expertise and absorptive capacity when designing the team for the product technology transfer project. Furthermore, they ought to maximise the quality of the multi-party interactions which occur throughout the process by leveraging on communication, cooperation and coordination. Enhancing these relational levers requires considering both direct and indirect forms of interconnections. The former group includes online and face to face meetings, training and workshops. Indirect interconnection refers instead to the shared platforms over which knowledge flows between sites in the form of documentation. These platforms should be user-friendly, easily accessible, and logically organised, reducing redundancies and ensuring comprehensiveness. They should also be easy to maintain and standardise to be re-used in new projects. When thought as a process, supplier selection is the procedure through which a company contacts several short-listed suppliers, ask them to prepare a bid for the object of the transfer, analyse and negotiate the proposals, and finally select the best candidate. The process involves both commercial and technical functions, the latter providing fundamental inputs throughout the procedures. It has been discovered that these inputs form a dense network of interconnections between knowledge exchange and supplier selection to the point that the two processes need to evolve together. In this context, this thesis project delivers a comprehensive tool and recommendations to structure the supplier selection process, by focusing on the factors which have proven to be most important: standardisation, automation, maintainability, time- reductions, resiliency, complexity management and cross-functional cooperation. This project contributes to the literature in several ways. Firstly, by addressing in a single study both knowledge exchange and supplier selection, it brought light to the impacts interconnections and dependencies between the two processes have on a product technology transfer. Secondly, this study enriches the body of literature on knowledge exchange: researches on the topic have mostly concerned early-lifecycle technologies transfers from universities to the industry. In contrast, this study addresses exchanges of knowledge for mature products and technologies between suppliers (the sending site and the receiving site), initiated and led by the company owning them (the focal company). Thirdly, studies on supplier selection procedures are scarce and mostly concern transfers of software. This study contributes to the topic by developing a management tool for transfers of product and technologies. This tool satisfies a uniquely wide range of requirements including some related to cross-functionality, an aspect of supplier selection procedures which has been largely neglected so far. In terms of practical contributions, this thesis project addresses the lack of a structured and re-usable approach to handle the pre-transfer processes. Particularly, the manual has been designed to cope well with large-sized transfers of different nature, while still performing at its best in small-scaled ones. Moreover, practitioners are provided with greater visibility on the range of dynamics and interconnections occurring during a product technology transfer. Developed in the context of the pharmaceutical industry, this thesis project is a first attempt at framing into a unified picture the processes of knowledge exchange and supplier selection, by recognising their complementary nature. The manual provides tools, recommendations and guidelines on the pre-transfer that go beyond the boundaries of this sector. On the one hand, practitioners can and are encouraged to apply the manual to industries different from the pharmaceutical. On the other, researchers are invited to enrich it by re-validating, refining and enhancing it in different contexts.