marine system design in new product development under...

IN DEGREE PROJECT MECHANICAL ENGINEERING,SECOND CYCLE, 30 CREDITS

, STOCKHOLM SWEDEN 2017

Marine System Design in New Product Development under Technological Uncertainty

TOMAS MALLUZZO

KTH ROYAL INSTITUTE OF TECHNOLOGYSCHOOL OF ENGINEERING SCIENCES

SD271X Tomas Malluzzo Degree Project in Naval Architecture Second Cycle 2017-10-03

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Preface!!

This!report!is!the!Master!of!Science!thesis!in!Naval!Architecture,!course!code!SD271X,!named!Marine!

system! design! in! New! Product! Development! under! technological! uncertainty,! performed! in!

collaboration!with!ABB!AB,!KTH!Industrial!Economics!and!Management!and!KTH!department!of!Naval!

Architecture.!

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Abstract!!

Given! the! necessity! to! achieve! vertical! integration! in! complex! NPD! projects,! this! study! offers! a!

perspective! on! the! implication! of! customers! and! suppliers! involvement! under! technological!

uncertainty.! The! purpose! of! this! work! is! to! use! SoSE! in! order! to! develop! a! framework! that! may!

support!Marine!system!design!in!NPD!under!technological!uncertainty.!It!has!been!assumed!that!it!is!

possible!to!achieve!the!Pareto!optimum!with!respect!to!the!key!variables!influencing!the!success!of!

the!NPD!process;!furthermore,!this!study!will!explore!the!possibility!to!tackle!the!goal!misalignment!

between!Customer,!Suppliers!and!OEMs!interacting!in!an!evolving!scenario!and!to!offer!a!decisional!

ground! for! the! mitigation! of! such! misalignment.! Concluding,! the! purpose! of! this! study! has! been!

expanded!by!answering!three!research!questions!on!how!Technological!uncertainty! influences!NPD!

in!Marine! System!Design,!what! alternative! frameworks! can!be!used! to! structure! such!designs! and!

how!System!of!Systems!Engineering!can!be!used!to!build!such!alternatives.!

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The!structure!of!the!model!built!in!this!report!is!based!on!the!concepts!related!to!Enterprise)System)of)Systems)Engineering!(SoSE),!Agency)Costs!and!Transaction)Costs)theories.!The!analysis!is!based!on!a! case! study! where! a! propulsion! system! has! to! be! developed! in! order! to! meet! the! incumbent!

environmental!deadline!imposed!by!the!Policy!maker,!while!taking!into!account!future!adaptations.!!

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Basing!on! the! results,! the! largest!misalignments! pertain! to! the!Value) dimension,!where! the! actors!prioritized!different!features!depending!on!their!different!positioning!of!the!actors!in!the!value!chain,!

leading!to!an!increase!of!the!Agency!costs!in!the!NPD.!On!the!other!hand,!the!possibilities!to!share!

the! knowledge,! to! split! the! costs! over! the! involved! parties! and! to! reduce! the! Transaction! costs!

represent! the!main! advantages! perceived! from! the! actors.! An! integrative) type! of! structure! of! the!collaboration! within! the! actors,! for! instance! establishing! a! Joint! venture! or! through! Integrated)development,!would!reduce!the!misalignments.!

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Finally,! ABB! can! use! SoSE! in! order! to! manage! its! internal! R&D! process! and! the! involvement! of!

customers! and! suppliers.! In! general,! SoS! can! help!OEMs! in! dealing!with! uncertainty! thanks! to! the!

concept! of! fluid! boundaries.! As! a! consequence,! the! integrated! system! will! benefit! of! greater!

flexibility!while!complying!with!the!requirements!given!by!the!customers!and!the!suppliers.!

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Keywords:!New!Product!Development,!Marine!systems!design,!Technology!Uncertainty,!System!engineering!


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Acknowledgments!!

I!want!to!express!my!gratitude!to!those!who!have!given!their!contribution!to!this!thesis!work.!I!would!

like!to!thank!the!Department!of!Naval!Architecture!and!the!department!of!Industrial!Economics!and!

Management! in! the! figures! of! Anders! Rosén,! Bo! Karlson,! Karl!Garme! and! Pernilla!Ulfvengren.! The!

spirit!of!cooperation!that!runs!between!these!departments!allowed!me!to!write!this!thesis.!

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In! particular,! I! would! like! to! thank! Pernilla! Ulfvengren! from! the! department! of! Industrial!

Management!and!Economics! for! supervising! this! thesis!work!with! stoical!patience!and! for!offering!

her! valuable! ideas.! ! Your! enlightened! guidance! represented!an! inexhaustible! source!of! stimulating!

insights!and!capable!support.!

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Moreover,! I! am! grateful! to! Karl! Garme! from! the! department! of! Naval! Architecture.! Your! clever!

approach!allowed!me!to!develop!this!work!that!falls!slightly!outside!of!the!conventional!approach!to!

the!role!of!the!Naval!Architect.!Thanks!to!your!admirable!mind!and!unbiased!disposition,!I!have!been!

able!to!fully!express!and!promote!my!ideas.!

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I!thank!ABB!as!a!whole,!for!giving!me!the!chance!to!cooperate!with!talented!and!skilled!professional!

who!offered!their!precious!insights!and!valuable!feedbacks.!

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I!am!grateful!to!KTH!–!Royal!Institute!of!Technology!for!these!two!memorable!years!where!I!had!the!

chance!to!work! in!a!vibrant!academic!environment!punctuated!of!qualified!professors!and!beloved!

friends.!

Infine,!tutto!il!mio!riconoscimento!va!a!chi!ha!sempre!dato!più!di!quanto!potessi!desiderare,!ha!fatto!

sacrifici!e!ha!supportato!continuativamente!il!mio!percorso!credendo!in!me:!a!te!il!mio!grazie...e!tutto!il!mio!amore.!

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Table!of!content!!

1 Introduction!......................................................................................................................................!8 1.1 Purpose!and!research!questions!................................................................................................!9 1.2 Scope!of!this!study!.....................................................................................................................!9 1.3 Report!structure!.........................................................................................................................!9

2 Case!study!.......................................................................................................................................!10 2.1 Problem!description!.................................................................................................................!10 2.2 NPD!phases!..............................................................................................................................!11 2.3 Ship!Lifecycle!and!system!design!.............................................................................................!12 2.3.1 Typical!ship!life!cycle!.........................................................................................................!12 2.3.2 Systems!design!..................................................................................................................!13 2.3.3 Validity!and!reliability!of!the!model!..................................................................................!14

2.4 Summary!..................................................................................................................................!14 3 Theoretical!Framework!...................................................................................................................!16 3.1 New!product!development!and!Technological!uncertainty!.....................................................!16 3.1.1 Technological!uncertainty!.................................................................................................!16 3.1.2 Suppliers!involvement!.......................................................................................................!17 3.1.3 Customers!involvement!.....................................................................................................!18 3.1.4 Summary!and!relevance!....................................................................................................!18

3.2 Transaction!costs!and!B2B!relations!........................................................................................!19 3.2.1 Differences!in!NPD!in!B2B!and!B2C!...................................................................................!19 3.2.2 Aligning!of!the!goals!..........................................................................................................!20 3.2.3 Relationship!in!B2B!............................................................................................................!20 3.2.4 Variables!of!B2B!relationships!...........................................................................................!21 3.2.5 Summary!and!relevance!....................................................................................................!23

3.3 Integrated!Product!Development!............................................................................................!23 3.3.1 IPD!success!factors!............................................................................................................!23 3.3.2 Supplier!classification!........................................................................................................!24 3.3.3 Summary!and!relevance!....................................................................................................!25

3.4 Systems!of!systems!engineering!..............................................................................................!25 3.4.1 Definition!of!System!of!Systems!engineering!....................................................................!25 3.4.2 Differences!between!Enterprise!SoSE!and!system!engineering!........................................!26 3.4.3 The!importance!of!goals!in!system!engineering!and!SoSE!................................................!26 3.4.4 Coping!with!complexity!in!SoSE!.........................................................................................!27 3.4.5 Summary!and!relevance!....................................................................................................!27

3.5 Summary!theoretical!framework!.............................................................................................!28 4 Method!...........................................................................................................................................!29


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4.1.1 Answer!to!the!research!questions!.....................................................................................!29 4.2 Exchanges,!context!and!goals!..................................................................................................!29 4.2.1 Selection!of!the!exchange!and!context!variables!..............................................................!29 4.2.2 Interview!process!..............................................................................................................!29 4.2.3 Goals!and!priorities!...........................................................................................................!30

4.3 Identifying!and!mitigating!divergences!....................................................................................!32 4.3.1 Method!and!Case!study!.....................................................................................................!33

5 Results!............................................................................................................................................!35 5.1 Customers!................................................................................................................................!35 5.2 Suppliers!...................................................................................................................................!36 5.3 OEM!.........................................................................................................................................!37 5.4 Policy!maker!.............................................................................................................................!38

6 Analysis!and!discussion!...................................................................................................................!39 6.1 Divergences!..............................................................................................................................!39 6.1.1 Value!Dimension!................................................................................................................!39 6.1.2 Other!divergences!.............................................................................................................!41

6.2 Mitigation!actions!....................................................................................................................!42 6.3 Convergences!...........................................................................................................................!43 6.3.1 Other!convergences!..........................................................................................................!44

7 Conclusions!.....................................................................................................................................!45 7.1 Limitations!................................................................................................................................!46

8 Future!Research!..............................................................................................................................!47

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List!of!figures!!Figure!1!New!product!development!process!........................................................................................!11 Figure!2!Ship!Lifecycle!and!documents!.................................................................................................!12 Figure!3!Systems!and!SoS!......................................................................................................................!14 Figure!5!Variable!and!priorities!Player!1!...............................................................................................!31 Figure!6!Variables!and!Priorities!Player!2!.............................................................................................!31 Figure!7!Goal!misalignment!..................................................................................................................!32 Figure!8!Goal!alignment!after!mitigation!..............................................................................................!32 Figure!9!Prioritization!in!the!Value!dimension!......................................................................................!39 Figure!10!Prioritization!in!the!Structure!dimension!..............................................................................!41 Figure!11!Prioritization!in!the!Process!dimension!.................................................................................!43 !

List!of!tables!!Table!1!Dimensions,!features!and!success!variables!according!to!Bagdoniene!....................................!22 Table!2!Difference!between!SE!and!SoSE!(Keating!et!al.!2015)!............................................................!26 Table!3!Scope!of!the!research!questions!..............................................................................................!29 Table!4!First!interview!scope!................................................................................................................!29 Table!5!Description!of!the!priority!scale!...............................................................................................!31 Table!6!Number!of!contacts!and!methodology!....................................................................................!34 Table!7!Interviewed!subjects!according!to!agency!and!role!.................................................................!34 Table!8!Customer!priorities!...................................................................................................................!35 Table!9!Suppliers!priorities!....................................................................................................................!36 Table!10!OEM!priorities!........................................................................................................................!37 Table!11!Policy!maker!Priorities!............................................................................................................!38 !

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Abbreviations!and!definitions!!IoT!g!Internet!of!Things!

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NPD!g!New!Product!Development!

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OEM!g!Original!Equipment!Manufacturer!

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SoSE!g!System!of!Systems!Engineering!

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The!following!definitions!are!being!used!in!this!study:!

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Exchange)variable:!Interactions!between!partners!of!the!same!system!or!between!systems.!

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Context)variable:!Element!directly!related!to!the!variation!of!the!system!boundaries.!

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OEM:! Entity!operating!as! interface!between!supplier!and!customer.!This!player! receives!and!sends!

exchanges!with!both!supplier!and!customers.!

)Supplier:!Entity!operating!in!the!upstream!with!respect!to!another!player!in!a!linear!relationship.!This!

player!produces!input!exchanges!to!the!OEM.!

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Customer:! Entity! operating! in! the! downstream!with! respect! to! the! OEM.! This! player! receives! and!

sends!exchanges!to!the!OEM.!

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Policy) maker:! Entity! that! exercise! influence! on! the! system! boundaries! by! issuing! for! instance!

regulations,!limitations!and!incentives.!

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1 Introduction Nowadays,!Internet!of!Things!(IoT)!and!Sustainability!are!the!two!keywords!on!every!modern!society!

as! IoT! allows! companies! to! collect! Big! Data! and! use! them! to! improve! their! processes! for!

sustainability.! While! being! fundamental! pillars! of! the! technological! development,! those! two!

keywords! represent! also! two! of! the! biggest! challenges! for! companies! and!OEMs.! In! an! era!where!

almost!everything!can!be!connected!and!integrated!it!is!fundamental!to!determine!what!to!integrate!

and!what!to!connect,!as!it!will!affect!the!whole!lifecycle!of!the!developed!product.!For!instance,!the!

United!Nations!Climate!Change!Conference!held!in!2015!will!affect!the!environmental!policies!of!the!

compliant!countries!and!the!product!development!of!the!companies!through!several!milestones!until!

2050.! Collaborative! New! Product! Development! (NPD)! helps! companies! in! achieving! their! goals!

through!collaboration!and!cooperation!with!suppliers!and!customers.!But!how!can!such!development!

be!organized!when!the!context!is!changing?!

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ABB!operates!both!as!a!system!developer!and!as!an!integrator!with!products!spanning!from!the!pulp!

and! paper! industry! to! the!Marine! industry.! First! tier! suppliers! are! often! utilized! in! order! to! fulfill!

market!demands!and!to!develop!products!and!solutions!that!fit!the!market!needs.!The!selection!of!

the!suppliers! responds! to!different!dynamics!depending!on! the! type!of!offered!solution!or! system.!

When!the!development!of!new!products!takes!place,!supplier!selection!acquires!a!primary!role!in!the!

potential!success!of!a!project!because!the!supplier!must!be!able!to!meet!the!market!demand!faced!

by!the!main!OEM.!

A!potential!challenge!is!posed!by!the!different!conditions!that!the!main!OEM!faces!when!compared!

to! its! suppliers.! For! example,! ABB! had! 33,82!M$! in! revenues! in! 2016! and! counts! around! 132000!

employees,!the!dimension!of!the!firm!does!not!always!match!the!size!of!the!suppliers!which!can!be!

smaller!in!terms!of!capacity!and!with!reduced!financial!stability.!Suppliers,!in!general,!must!be!able!to!

guarantee!sufficient!production!volumes!and!adequate!quality!compared!to!the!standard!defined!by!

ABB!(the!main!OEM).!Moreover,! the!aftersales!services!must!be!guarantee!all!over! the!duration!of!

the!service!contracts.!For! instance,!some!product!might!be!guaranteed!for!10!years!and,!while! it! is!

reasonable!to!assume!that!ABB!will!still!be!operating!in!10!years,!small!suppliers!can´t!offer!the!same!

certainty.!In!this!case,!ABB!must!take!over!the!responsibility!for!the!service!sold!with!the!product!and!

will! incur! in! extra! costs.! For! these! reasons,! when! approaching! NPD,! it! is! important! to! operate! a!

careful! selection! of! the! suppliers! that! takes! into! account! the! different! scales! of! the! involved!

companies.!

When! not! adequately! operated,! an! erroneous! selection! can! affect! the!whole! value! chain! and! the!

lifecycle! of! the! product.! Such! effect! is! magnified! when! the! company! develops! new! products! in!

cooperation!with!the!suppliers!and!Technology!uncertainty!is!added!to!Economic!uncertainty.!

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Even!though!Technology!uncertainty!has!been!studied!under!several!perspectives!over!the! last!few!

decades,! this! research!expands! the! knowledge!on!Technology!uncertainty! in!NPD,!with! a! focus!on!

new!products.!The!topic!will!be!explored!making!use!of!a!case!study!that!will!offer!a!broad!point!of!

view!on!the!influence!that!technology!uncertainty!has!on!the!development!of!new!product!on!every!

actor! involved! in! the! development,! from! the! OEM! to! the! firstgtier! suppliers.! Also,! the! degree! of!

involvement! of! the! customers! and! the! suppliers! will! be! analyzed! in! order! to! determine! its!

implications.! !Based!on! the!data!of! the!Organization! for!Economic!Cogoperation!and!Development,!

Sweden!spends!3,4!%!of!its!GDP!in!R&D!and!scored!as!2nd!most!innovative!country!according!to!the!

Global! Innovation! Index! in! 2016.!Within! this! scenario,! cooperative! product! development! has! been!

largely!studied!(Melander!2014)!but!there!is!still!room!for!improvement.!

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While!current!research!focuses!on!several!aspects!of!uncertainty!and!Supplier’s!involvement!in!NPD,!

in!some!occasion!the!development!of!a!new!system!or!product!will! require!the! involvement!of!the!


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potential!customers!of!a!product.!Therefore,!additional!knowledge!is!required!in!order!to!determine!

the!influence!of!the!involvement!level!of!the!potential!customers!and!of!the!suppliers.!

As!stated!before,!ABB!operates!very!often!as!OEM,!developing!solutions!that!include!products!from!

its! portfolio! and! products! supplied! by! third! parties.!When! developing! highly! integrated! solutions,!

being!in!contact!with!customers!acquires!primary!relevance!as!the!solution!is!developed!for!a!specific!

need!with!specific!requirements.!

In! this! study,! a! holistic! approach! is! taken!where! suppliers,! the!main! firm! as! well! the! customer! is!

analyzed.!!By!analyzing!the!interaction!between!suppliers,!the!firm!and!the!customers,!the!aim!is!to!

individuate! key! factors! that! affect! resource! allocation,! division! of! the! role,! the! allocation! of! the!

responsibilities!and!the!alignment!of!the!goals.!Because!of!the!complexity!of!the!interactions!object!

of! this! study,! a! highly! systematic! approach! is! required.! For! this! reason,! several! System! of! System!

Engineering!(SoSE)!concepts!will!be!applied.!Technical!uncertainty!is!to!be!considered!as!a!contextual!

factor!and!System!Engineering!usually!does!not!consider!variations!of!the!context!and!of!the!system!

boundaries.!For!these!reasons,!this!study!is!based!on!the!concept!of!System!of!Systems!engineering,!

which!allows!the!practitioner!to!take!into!account!contextual!factors!and!shifting!system!boundaries.!

Although!Enterprise)SoSE! is!the!branch!of!SoSE!that!deals!with!enterprises!relationships,!within!this!study! the! terms!SoSE! is!being!used! for! simplicity.!Concluding,! the!exchanges!between! the! systems!

operating!in!the!system!of!systems!must!also!be!structured!in!order!to!promote!a!systemic!analysis!

of!the!problem.!

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1.1 Purpose and research questions !

The!purpose!of!this!thesis!is!to!use!SoSE!in!order!to!develop!a!framework!that!may!support!Marine!

system!design!in!NPD!under!technological!uncertainty!

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This!thesis!will!explore!the!answer!to!the!following!research!questions:!

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1. What! are! the! implications! of! involving! the! customers! and! the! suppliers! in!NPD!projects! under!

technology!uncertainty?!

1.1. How!can! the!challenges!posed!by! the! technology!uncertainty!be! tackled!by! increasing! the!extent!of!the!involvement!of!the!customers!and!the!suppliers!in!NPD?!

2. What!kind!of! systemic! framework! can!be!used! for!managing!Marine! system!design! taking! into!

account!technological!uncertainty,!goal!misalignment!and!relationship!management?!

3. How!can!NPD!be!structured!in!a!SoSE!framework?!

1.2 Scope of this study This! study! mainly! analyzes! relationships! management! problems! and! coordination! problem.! This!

study! does! no! address! suppliers! selection! methods! that! should! be! studied! in! order! to! be! better!

embodied!in!the!study!and!offer!a!complete!perspective!on!the!research!problem.!Such!problematics!

are!to!be!analyzed!only!after!a!thoughtful!and!meaningful!suppliers’!selection!has!been!performed.!

1.3 Report structure The! report! has! seven! main! chapters.! First,! a! general! introduction! on! the! case! study! and! on! the!

research!problem!is!given.!In!the!second!section,!the!case!study!is!described!in!deed!together!with!a!

typical!ship!lifecycle!and!the!validity!of!the!model!is!described.!The!third!chapter!offers!an!overview!

of! the! literature! related! to! the! research! problem.! In! this! section! the! concept! of! New! Product!

Development,!Technological!uncertainty,!B2B!relations,!Integrated!product!Development!and!System!


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of!Systems!Engineering!are!explained.!The!fourth!chapter!describes!the!model!used!to!answer!to!the!

research!questions.! In!the!fifth!chapter!the!results!are!presented.!Finally,! the! last!two!chapters,!six!

and! seven,! offer! a! critical! analysis! of! the! results,! the! conclusion! and! provide! some! suggestion! for!

further!studies!

2 Case study This! section! presents! the! case! study! that! this! research! is! based! on.! At! the! same! time,! a! general!

representation!will!be!offered!in!order!to!identify!the!main!components!of!the!study!which!are!NPD,!

SoSE!and!Technological!uncertainty.!

2.1 Problem description ABB!is!a!global!provider!of!electric!propulsion!solutions!for!the!marine!market.!Due!to!the!high!level!

of!integration!and!the!complexity!of!this!kind!of!systems,!ABB!(OEM)!often!faces!challenges!related!

to! Suppliers’! selection! and! relationship! management.! Designing! an! adequate! propulsion! system!

requires! the! integration! of! several! subgsystems! like! the! propulsion! unit,! power! generation,! power!

distribution,!motion!control!and!the!fuel!management.!Nowadays,!the!increased!awareness!toward!

the! environment! has! triggered! the! enforcement! of! new! environmental! regulations! that! impose!

stricter! limit!on!pollutant!emissions!and!energy!consumption.!Such!context!has!pulled! the!demand!

for!electric!propulsion!systems!and!promoted!the!development!of!several!new!technologies!related!

to!the!power!generation!and!onboard!storage!(e.g.!Batteries,!Fuelgcells,!LNG).!

Due! to! the! transition! from! heavy! fuel! oil! (HFO)! to! renewable! resources,! OEMs! like! ABB! have! to!

develop!new! systems!and! solutions! in!order! to!maintain! their! competitiveness!within! the! industry!

segment.! In! order! to! do! so,! the! company! requires! a! greater! interaction!with! both! customers! and!

suppliers! aimed! to! identify! needs! and! risks! related! to! the! development! of! new! technologies! and!

more!efficient!marine!solutions.!This!enhanced!interaction,!in!turn,!poses!new!challenges!on!how!the!

relationships! with! customers! and! suppliers! must! be! analyzed! and! managed! in! order! to! identify!

divergences! in! goals! and! interests! and! to! tackle! them! through!mitigation! actions.! These! extended!

interactions!between!multiple!actors!take!place!in!what!can!be!considered!a!complex!social!system!

aiming!to!maximize!profit!as!subjective!variable,!depending!on!the!position!of!the!player!in!the!value!

chain.!!

Considering!a!generic!technologic!paradigm,!complex!technical!systems!are!developed!with!the!help!

of! system!engineering! techniques,!where!system!requirements!and!goals!are!defined!and! targeted!

from!the!beginning!to!the!end!of!the!design.!On!the!other!hand,!system!engineering!relies!on!defined!

system!boundaries!and!metrics!that!must!be!defined!in!advance!and!accepted!by!all!the!component!

of!the!system.!Unfortunately,!when!dealing!with!multiple!technologies!and!policy!makers,!the!system!

variables!cannot!be!always!clearly!defined!and!the!system!boundaries!are!constantly!changing!and!

evolving!depending!on!the!context.!Moreover,!OEMs!cannot!be!considered!as!isolated!systems!due!

to! their! constant! interactions!with! third!parties! (e.g.!OEMs,! customers,!etc.).! ! For! these! reasons,! a!

different!approach!able!to!include!context!and!multiple!systems!must!be!utilized.!

Systems!of!Systems!Engineering!(SoSE)!is!a!more!appropriate!approach!to!these!kind!of!problem!as!it!

allows! to! include! contextual! variables,! changing! system! boundaries! and! multiple! systems!

interactions.!In!order!to!enable!an!effective!analysis!of!the!problem,!the!case!study!has!been!divided!

in!a!set!of!subsystems!and!the!interactions!between!the!systems!have!been!structured!and!defined!

according! to! several! metrics! described! in! the! next! chapter.! At! the! same! time,! due! to! the!

technological! uncertainty! surrounding! the! systems,! a! product) development) context! can! be!considered.! This! consideration! is! true! only! for! newbuilding! projects,! where! large! part! of! the!

uncertainty!has!not!been!unveiled!from!previous!experiences.!In!newbuilding!projects,!the!concepts!


11

defined!at!an!early!stage!is!followed!by!the!sogcalled!functional)design.!In!the!functional!design,!the!designer!will!define!the!main!elements!of!the!equipment!(machinery!list)!and!in!which!sequence!they!

will! be! connected! (single! line! diagram).! These! two! elements! are! the! result! of! the! integration! of!

several!components!that!may!pertain!to!different!systems!at!the!same!time.!

In!the!next!section!more!insights!will!offer!greater!insights!on!new!product!development!and!how!it!

can!be!assimilated!to!a!ship!life!cycle.!Although!the!section!gives!a!view!on!the!whole!cycle,!this!study!

will! focus! specifically! on! the! functional! design!phases,!where! the!uncertainty! is! high! and! the!OEM!

plays!a!major!in!the!success!of!the!development.!!

2.2 NPD phases Handfield! et! al.(1999)! propose! a! framework! aimed! to! analyze! the! involvement! of! suppliers! in! the!

early!part!of!a!product! life!cycle!(Figure!1).!According!to!such!framework,!NPD!is!performed!trough!

series!of!processes,!or!iteration,!aimed!to!refine!the!design!and!converge!to!a!solution!feasible!for!full!

scale!production.!

!

!

!

Figure!1!New!product!development!process!

During! the! first! phase,! the! idea! is! generated! from! the!marketing!department! and! the!designers! in!

order!to!satisfy!a!need.!At!this!stage,!when!there!is!more!than!one!available!technology,!the!potential!

of! each! technology! will! be! assessed! and,! at! the! same! time,! the! potential! supplier! could! be!

determined.!In!the!second!phase,!several!economic!evaluations!will!be!performed!in!order!to!identify!

the!best!solution!available!for!the!customer.!At!the!end!of!the!third!phase,!we!will!see!the!definition!

of! a! concept! and! the! formulation! of! the! system! requirements.! These! requirements! will! be! then!

frozen!and!will!constitute!the!basis!for!a!more!ingdepth!design.!

Once! the! suppliers! have! been! identified,! the! buying! and! supplying! organization! will! define! the!

blueprint!and!the!design!specifications! in!order!to!develop!a!prototype.!The!prototype!will!provide!

useful! insight!and!the!change!to!test! it!before!moving!to!the!full! scale!production.!Suppliers!play!a!

critical! role! in! NPD! because! they! can! offer! knowledge! and! innovative! solutions! to! the! developing!

process.!

Whether!to!involve!supplier!at!and!early!of!late!stage!is!dependent!on!two!main!factors:!the!rate!of!

change!of!the!technology!and!the!extent!of!the!supply.!When!the!technology!change!at!a!low!pace!

and!the!supply!is!concentrated!on!a!few!single!items,!the!supplier!can!be!involved!at!a!later!stage.!On!

the! contrary,! large! scale! production! and! high! technology! pace! suppliers! must! be! involved! at! an!

earlier!stage!because!of! the!reduced!“Shelf! time”.!Early! involvement!of! the!supplier!will!guarantee!

upgtogdate!product!and!justgingtime!supply.!

!

In!ship!design!processes,!these!phases!usually!represent!the!whole!ship!lifecycle.!Therefore!a!typical!

shipbuilding! process! can! be! considered! as! a! unique! NPD! where! the! described! phases! are!

concentrated!into!a!unique!phase!that!lead!to!the!deal!between!the!shipyard!and!the!shipowner.!The!

link!between!NPD!and!Ship!design!will!be!strengthened!in!section2.3.!

1.!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Idea!

generapon:!

Voice!of!the!

customer!

2.!!Business/

Technical!

Assesment!

(Preliminary)!

3.!!!!!!!!Product/

Process!Service!

Concept!

Development!

4.!!!!!Product/

Process!Service!

Engineering!

and!Design!

5.!!!!!!!!!!!!!!!!!!

Prorotype!

Build,!Test!and!

Pilot/RampgUp!

for!Operapons!

FullgScale!

Producpon/

Operapon!

Possible!Supplier!Integration!Points!


12

2.3 Ship Lifecycle and system design A! typical! ship! lifecycle! can! be! compared! to! a! new! product! development! process.! This! section!will!

describe!the!several!phases!of!the!ship’s! lifecycle,!the!key!deliveries!related!to!each!phase!and!will!

offer! the!system)model)which! resemble! the! interactions!between! the! several!players! involved! in!a!

NPD!or!a!shipbuilding!process.!

2.3.1 Typical ship life cycle When!a!shipyard!does!not!respect!the!given!requirements,!it!will!incur!in!penalties!which!may!easily!

erode! the! available! margin.! As! the! negotiation! of! the! requirements! occurs! in! the! first! phase,!

suppliers!must!be!involved!since!this!early!stage!in!order!to!guarantee!the!feasibility!of!the!system.!

As! shown! in! figure! 2,! several! documents!must! be! produced! before! the! contract! is! signed! and! the!

engineering!work!performed!before!the!contract!will!be!a!cornerstone!all!over!the!execution!phase.!

!Figure!2!Ship!Lifecycle!and!documents!

The!content!of!the!documents!will!be!distributed!as!follows:!

!

g Marketing!

The!generation!of! the! idea!and! the!market!potential!will!be!determined! in! this!document.! It!often!

contains!market! study,!evaluation!of! future! technology!and!promotion!of!new!technologies.!These!

activities! are! performed! in! order! to! promote! the! shipyard! in! Industry! fairs,!marketing! events! and!

specialized!fairs.!

g Letter!of!intent!(LOI)!

The!letter!of!intent!contains!the!owner!wishes;!it!can!be!signed!based!on!two!main!reasons:!the!wish!

to! expand! the! fleet! for! capacity! reasons,! the! wish! to! employ! new! technology! or! exploit! other!

mechanism! (e.g.! public! funding,! research,! pilot! installations).! The! LOI! contains! several! information!


13

related!to:!Technical!specification,!commercial!characteristics!(Payload),!General!arrangements,!first!

feasibility!study!and!a!first!quotation.!

g Basic!design!

This! document! is! the! first! draft! of! the! design.! It! is! an! evolution! of! the! concept! generated! in! the!

marketing!phase!and!will!define!the!main!characteristics!of!the!technical!paradigm!to!be!operated.!

For! instance,! in! a! shipbuilding! case! it! will! define! type! of! ship,! type! of! propulsion,! first! resistance!

calculations!and!first!draft!of!general!plan.!

g Feasibility!

The!feasibility!study!will!be!the!foundation!of!the!operational!plan.!The!main!technical!aspects!of!the!

system! will! be! verified! in! order! to! assess! the! feasibility! of! the! concept! solutions! in! relations! to!

technological!and!operational!requirements.!This!study!will!also!lead!to!the!definition!of!the!so!called!

“ship! milestones”! which! represents! the! delivery! points! in! the! execution! phase! designed! in! the!

Operational!planning.!

g Operational!Planning!

This!study!will!determine!how!the!ship!parts!will!be!built,! in!which!sequence!and!in!what!time.!The!

operational!plan!is!the!base!needed!to!plan!the!purchase!plan!and!select!the!suppliers.!

g Offer!presentation!and!Negotiation!

Once!the!basic!design!and!the!operational!planning!have!been!completed!the!shipyard!will!formulate!

an! offer! with! a! quotation! for! the! ship.! During! the! negotiation! several! aspects! will! be! discussed:!

payment!plan,!price,!suppliers!and!credit!insurance.!

2.3.2 Systems design This! section! will! describe! the! systems! designed! to! structure! the! problem! described! in! the! main!

introduction.!

g System!1!SuppliergOEM!

Supplier! and! OEM! can! be! considered! as! a! system! where! the! supplier! offers! input! in! terms! of!

technology! development! and! the! OEM! issue! the! technical! requirement! needed! to! address! the!

system! development.! According! to! standard! system! engineering!model! (Keating! et! al.! 2015)! they!

interact!in!order!to!optimize!the!product!issued!by!the!supplier!basing!on!the!unitary)goal!defined!by!the!OEM.!

g System!2!CustomergOEM!

While! interacting! with! the! supplier,! the! OEM! exchanges! information! and! cooperate! with! the!

customer.! The! customer! produces! the! operational! requirements! that! will! be! translated! from! the!

OEM! into! technical! requirements,!which! in! turn!will! be! transferred! to! the! supplier.! The!exchanges!

between!the!customer!and!the!OEM!will!be!considered!as!a!separate!system!in!order!to!simplify!the!

analysis!of!their!relationship.!

g System!3!SuppliergCustomer!

The! third! system! contains! the! customer! and! the! supplier.! Although! the! exchanges! between! these!

two! actors! is! marginal,! a! minimum! level! of! integration! will! always! be! considered! basing! on! the!

assumption! that! the! customer! needs,! considered! as! end! user! specifications,! will! influence! the!

development!of!the!supplier.!

g Systems!of!systems!SuppliergOEMgCustomer!

Since!the!contextual!factors!affect!the!boundaries!of!all!the!systems!at!the!same!time(Keating!et!al.!

2015),! these! three! system! has! been! coupled! in! a! system! of! systems! (SoS)! where! the! contextual!

variables! affect! the! system! boundaries! of! the! SoS! according! to! the! dynamics! described! in! the!

previous!chapter.!The!image!below!offers!a!representation!of!the!SoS.!

Figure!3!shows!a!graphic!representation!of!the!SoS!and!of!the!subsystems.!


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!

Figure!3!Systems!and!SoS!

The!blue,!green!and!purple! lines!represent!the!system!boundaries!of! the!subsystems!one,! two!and!

three.! The! black! line! represents! the! boundary! of! the! SoS.! Although! the! black! line!may! suggest! a!

univocal! definition! of! the! System!of! systems!boundaries,! the! SoS! boundaries! are! fluid! and! change!

depending!on!the!policy!maker!actions.!For!instance,!one!subsystem!can!temporarily!reside!outside!

this!boundaries!over!a!defined!span!of!time.!

2.3.3 Validity and reliability of the model This!model! represents! a! simplification!of! the! reality.! In! the! “real!world”! the! interactions! are!more!

complicated! because! suppliers,! customers! and! OEMs! may! pertain! to! tertiary! subsystems.! For!

instance,! there! can! be! more! than! one! supplier! for! the! same! product.! In! this! case,! competition!

between!suppliers!must!be!analyzed!as! it!affects!the!pricing,!the!differentiation,!the!marketing!and!

the!way!other!suppliers!interact!with!the!context.!At!the!same!time,!the!OEM!may!be!influenced!by!

internal! costs! or! other! dependencies! related! to! its! business! that! may! affect! its! decisions.! For!

instance,! with! respect! to! the! case! study,! the! formal! organization! of! the! company! counts! several!

business!units!that!eventually!compete!with!each!other.!In!order!to!simplify!this!study!and!to!respect!

the!given!time!frame,!these!kinds!of!interactions/frictions!will!not!be!considered!and!each!element!is!

seen!as!internally!homogeneous.!

!

In!general,!such!simplification!can!be!considered!realistic!for!the!following!reasons:!

!

• Since!the!predominant!technology!has!not!been!defined!yet,!it!is!reasonable!to!assume!that!

each! supplier! will! develop! its! own! technology! separately.! Such! differentiation! smoothen!

competition! in! terms! of! prices! and! induces! the! suppliers! to! focus! on! their! internal! R&D!

process,! selfgsustaining! the!differentiation.!Consequently,! the!suppliers!will!not!engage!any!

competing!behavior!with!the!other!suppliers!apart!from!R&D.!

• While! internal! friction!may!be!present,!the!overall!goal!of!all! the!subsystems!of!the!system!

suppliers! is! to!achieve!profitability!of! the!developed!technical!paradigm.! It! is! reasonable!to!

assume! that!when! interacting!with! the! suppliers,! the!OEM!will!operate!as!a!unique!entity,!

and! the! internal! components! (e.g.! business! units)! will! coordinate! in! order! to! achieve! the!

overall!goal.!

2.4 Summary ABB! operates! as! OEM! and! developer! in! the! design! of! high! complex! propulsion! systems.! These!

systems! include! fuel!management,!power!production,! storage!and!distribution,!control! system!and!

other! subgsystems.!The!company!develops! internally!only!a!portion!of! the! total! system;! the! rest! is!

purchased!from!third!party!and!the!final!solution!is!tailored!basing!on!the!need!of!its!customer.!Due!

to! recent! changes! in! the! environmental! regulation! concerning! the! Sulphur´s! emissions! within! the!


15

Baltic! area,! several! new! technologies! are! being! screened! in! order! to! determine! their! potential!

development! with! respect! to! the! customer’s! needs.! Within! this! scenario,! there! are! several!

uncertainties!related!to!the!success!of!each!technology.!The!achievement!of!the!goals! is! influenced!

by! several! key! factors! like! profitability,! Opex,! compliance,! technology! enablers! and! so! on.! Such!

uncertainties! pose! several! challenges! related! to! the! development! of! an! appropriate! solution! that!

satisfy!all!the!actors!at!the!same!time,!while!they!maintain!different!priorities!and!key!values.!

!

The!design!of!the!propulsion!system!and!subsystems!is!part!of!the!ship!design!process,!which!in!turn!

pertain! to! the! early! stage! of! the! ship! lifecycle.! Given! that! the! process! relates! to! a! newgbuilding!

project,! the! early! stages! of! the! ship! lifecycle! presents! several! similarities! with! a! New! Product!

Development!process,!where!customers,!suppliers!and!OEM!need!to!coordinate!their!efforts!in!order!

to!deliver!a!feasible!solution.!While!interacting!with!each!other,!these!three!actors!need!to!account!

the! policies! into! their! decision! process! as! they! represent! the! boundaries! of! the! system.! In! the!

analyzed!scenario,!the!policy!maker!recently!issued!a!new!regulation!causing!a!change!in!the!system!

boundaries.!As!the!regulation!will!affect!the!allowed!emissions!at!different!time!stages!(2020,!2030!

and!2050)!the!system!boundaries!will!change!consequently,! therefore!a!typical!System!engineering!

approach!cannot!be!used!because!of!its!need!of!fixed!boundaries.!

!

In! order! to! perform! the! analysis! of! the! interactions! between! the! several! actors,! they! have! been!

divided!among! three!subsystems! that! interact!with! the!contextual!global! system.!Even! If! the! three!

actors! could! be! further! discretized,! a! series! of! simplifications! regarding! their! structures! and! their!

behavior!has!been!made! in!order! to!simplify! the!analysis.! In!particular,! internal!competition!within!

the! single! organizations! has! been! neglected! and! every! technology! has! been! assumed! to! have! the!

same!success!potential,!consequently!any!of!the!suppliers!will!be!prioritized.!

!

!

!

!

!

!

!

!

!

!

!

!

!

!

!

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3 Theoretical Framework The!goal!of!this!chapter! is!to!expand!on!the!theoretical!framework!used!as!basis!for!this!work.!The!

problem!formulation!is!divided!in!four!main!themes:!New!Product!Development,!Transaction!costs,!

Integrated!Product!Development!and!System!of!Systems!Engineering.!The!first!section!describes!the!

current!research!on!New!product!development,!Technological!uncertainty,!Supplier!and!Customer’s!

involvement.! The! second! section! deepens! the! examination! of! the! relations! between! customers,!

suppliers! and! OEMs.! In! general,! a! set! of! problematics! is! presented! in! order! to! give! a! complete!

overview! of! the! influence! of! these! actors! in! the! product! development! and! describe! their!

expectations.!These!interactions!are!structured!in!a!set!of!variables!showed!in!section!3.2.4.!Section!

3.3!describes! the! sogcalled! Integrated!Product!Development!process!which! is! an!extension!of!New!

product! development.! Within! this! section,! the! main! factors! affecting! the! success! of! integrated!

product!development!are!being!described!and!Suppliers!classification!frameworks!are!being!offered.!

Finally,! section! 3.4! defines! Systems! of! Systems! Engineering,! the! differences! with! regular! system!

engineering,!the!concept!of!systems!boundaries!and!the!challenges!related!to!this!practice.!

!

The!information!given!in!each!section!are!summarized!at!the!end!of!each!section.!Moreover,!in!order!

to!clarify!the!relevance!of!the!exposed!literature!with!respect!to!the!goal!of!this!study,!the!relevant!

links!between!the!section!and!the!goal!of!this!study!are!presented!in!these!sections.!

3.1 New product development and Technological uncertainty This! section! describes! the! context! of! Technological! uncertainty,! and! the! notions! of! Customer! and!

suppliers’!involvement.!First,!the!Technological!uncertainty!is!framed!and!defined!among!other!types!

of! uncertainty,! and! configured! in! New! Product! Development! processes! and! how! it! affects! them.!

Secondly,! the! challenges! and! threats! of! involving! the! suppliers! in! NPD! will! be! analyzed! and! an!

overview!of!the!current!literature!on!this!topic!will!be!given.!Finally,!the!current!literature!concerning!

customer’s! involvement!will! give!an!overview!of! the! critical! relationship!between! the!OEM!and! its!

customers.!

3.1.1 Technological uncertainty Uncertainties!can!affect!several!aspects!of!a!firm´s!business!(Hall!and!Martin!2005;!Lee,!Yeung,!and!

Edwin!Cheng!2009):!organization,!market,!technology,!society!to!mention!only!a!few!of!them.!

Technological! uncertainty! has! been! largely! studied! in! the! previous! years.! When! operating! NPD,!

choosing! the! right! technology! as! an! impact! on! the! flexibility! required! to! the! design! of! the! new!

product! (Krishnan!and!Ulrich!2001).!For! instance,!a!greater! flexibility!of! the!design! is!desired!when!

the! chosen! technologies! have! a! high! probability! of! failure! or! to! be! replaced.! Other! sources! of!

technology!uncertainty!arise!when!there!is!more!than!one!technology!available,!but!none!of!them!is!

mature! enough! to! determine! which! one! will! be! predominant! in! the! future! market.! Moreover,!

compatibility! with! old! technologies! elevates! the! degree! of! Technological! uncertainty! (Gupta! &!

Wilemon!1990).!

Social! uncertainties! are! also! influencing! the! decision! process! because! large! investments! in! R&D!

projects!are!discouraged!when!affected!by!uncertainty! (De!Cian!and!Massimo!2011).!Risk!aversion!

and!technology!uncertainty!can!lead!to!an!optimized!use!of!the!available!resources!and!technology!

rather! than! promoting! an! innovation! process! (Koundouri,! Nauges,! and! Tzouvelekas! 2006).! For! all!

these!reasons!managers!tends!to!collect!as!many!information!as!possible!in!order!to!reduce!the!level!

of!uncertainty.!Unfortunately,!because!of!the!knowledge)complexity,!collecting!more!information!not!

always!decrease!the!level!of!Technological!uncertainty!(Ditillo!2004).!

!

HighgTech! companies! always! strive! to! develop! cutting! edge! products! in! order! to! maintain!

competitiveness! and! market! appeal.! Technology! push! allows! OEMs! to! choose! between! several!

technologies!basing!on!the!needs!of!their!customers.!On!the!other!hand,! in!the!early!stage!of!each!


17

technology! is! hard! to! predict! what! will! be! the! acceptance! level,! therefore! the! uncertainty! will!

inevitably!grow!(Henderson!and!Clark!1990).!When!more!than!one!technology!is!evolving,!during!the!

early!phases!companies! tends! to!wait! in!order! to!determine!which! technology!will!predominate! in!

the! long! term! (Henderson! &! Clark! 1990).! New! technologies! may! need! a! larger! amount! of! time,!

compared!to!other,! in!determining!their!predominance!on!the!market.!While! the!dilemma! is!being!

solved,!firms!tends!to!utilize!well!established!technologies!rather!than!innovative!risky!technologies!

(Clark!1989).!!

!

NPD! often! involves! large! technological! uncertainty! and,! when! new! products! are! developed! this!

uncertainty! affect! the! selection! of! the! suppliers! since! not! every! supplier! can! provide! the! same!

product.!The!selection!of!the!right!supplier!is!crucial!as!it!guarantee!to!the!firm!the!availability!of!the!

right!technology!at!the!right!time.!Selecting!the!wrong!supplier!can!lead!to!increased!cost,!delays!or!

failure! of! the! delivery.! For! these! reasons,! it! is! important! to! operate! a! strategic! and! thoughtful!

selection!of!the!supplier!which!takes!into!account!suppliers´!capability!and!technology!requirements.!

Strategic! supplier’! selection! has! been! largely! examined! and! several! methodologies! based! on!

analytical! frameworks! and!multivariable! approaches! have! been! suggested! in! order! to! compensate!

the! degree! of! uncertainty! that! involves! the! selection(Kaufman,! Wood,! and! Theyel! 2000).! These!

methods!focus!on!the!supplier!selection!once!the!technicalgparadigm!has!been!solved,!therefore!are!

to!be!used!at!a!later!stage!in!order!to!compare!and!evaluate!several!suppliers!for!a!specific!solution.!

Once!the!supplier!has!been!selected,!their! involvement!in!NPD!has!to!be!carefully!determined!as!is!

will!influence!the!success!of!a!project!(Wagner!and!Hoegl!2006).!

!

Collaborative!NPD!is!a!useful!tool!aimed!to!mitigate!the!risks!fueled!by!the!technological!uncertainty.!

When!the!internal!capacity!cannot!meet!the!required!resources,!acknowledgeable!suppliers!can!offer!

the!extragcapacity!needed!in!order!to!obtain!the!innovation!(Oh!and!Rhee!2008).!When!collaborating!

with! suppliers! the! chosen! technology!and! its! success!will! influence! the! relation!with! the! customer!

and!vice!versa.!

3.1.2 Suppliers involvement (van! Echtelt! et! al.! 2008)! suggest! that! building! longgterm! relationship! with! the! suppliers! allows!

companies!to!build!a!“supplier!base”!which!allows!the!fulfillment!of!future!needs.!On!the!other!hand,!

one!may!argue!that!when!new!products!are!being!developed,!not!many!suppliers!are!available!and!in!

some!extreme!case!they!may!not!exist!at!all,!therefore!longgterm!relationship!are!not!a!viable!option.!

At!the!same!time,!establishing!longgterm!relationship!will!increase!the!amount!of!information!shared!

between! the! organizations.! The! leaked! information!may! allow! the! suppliers! to! descend! the! value!

chain! and! compete! with! the! supplied! firm.! Such! problem! can! be! mitigated! by! choosing! an!

appropriate! organizational! policies! and! governance(Oxley! and! Sampson! 2004).! Also! reducing! the!

scope!of!the!collaboration!with!the!suppliers!can!prevent!the!leakage!of!information,!it!is!argued!that!

more!“protective”!policies!can´t!fully!exclude!the!risk!of!leak!of!information,!therefore!reducing!the!

scope!of!the!collaboration!remain!the!most!accepted!method!(Oxley!and!Sampson!2004).!

!

The!question!if!the!Supplier’s! involvement!has!an!overall!positive!or!negative!effect! is!however!still!

open! and! debated.! Comparisons! between! industries! operating! in! different! geographical! areas! and!

with!different!strategies!show!that!Supplier’s! involvement! in!NPD!has!a!positive!effect!on!resource!

allocation!and!timegtogmarket!(Clark!1989;!Birou!and!Fawcett!1994).!The!positive!effect!is!expressed!

by!a!major!fractioning!of!the!risks,!the!possibility!for!the!involved!firms!to!acquire!new!competencies!

and!enhanced!collaboration!between!crossgfunctional!teams.!At!the!same!time,!it!has!been!shown!as!

Supplier’s! involvement! has! a! positive! effect! only! for! mature! industry! segments! (Eisenhardt! and!

Tabrizi! 1995).! Supplier’s! involvement! and! Development! time! have! a! negative! correlation!which! in!

turn!leads!to!higher!costs!and!slower!product!development.!In!highly!innovative!businesses,!timegtog

market!is!a!fundamental!factor!that!can!influence!the!success!of!a!product.!

!


18

According! to! the! same! studies,! in! order! to! reap! all! the! advantages! of! Supplier’s! involvement! two!

different! frameworks! have! to! be! analyzed:! Contingency! factor! on! the! organizational! level! and! the!

management!of!Supplier’s!involvement!on!the!project!level!(Wagner!and!Hoegl!2006).!!

!

Within!the!first!framework,!the!technical!paradigm!has!to!fit!the!suppliers’!capability!and,!when!the!

design! has! a! high! level! of! complexity,!modular! solutions! represent! the! best! solution! (Boutellier!&!

Wagner!2003).!Such!systems!guarantee!the!functionality!of!the!system!when!one!or!more!parts!need!

to! be! upgraded! and,! at! the! same! time,! the! different! modules! of! the! design! can! be! assigned! to!

different!suppliers!(Vonhippel!1990).!On!the!other!hand,!integrated!systems!may!require!each!single!

part! to! interact!with!more! than!one!other! component! at! a! time,! therefore! a!modularized!product!

development! may! be! difficult! or! impossible! to! achieve! because! a! more! integrated! design! will! be!

required.!Other!contingencies!factors!play!a!role!in!the!success!of!a!strategy;!Ownership!right!of!the!

developed!technology,!R&D!capacity!and!Knowledge!distribution!can!affect! the!product! lifecycle!at!

every!stage.!

!

Under! the! second! framework,! the! buyergsupplier! relationship! can! be! affected! by! agency! and!

coordination!problems.!In!general,!increasing!the!planning!phase!of!a!project!is!a!good!way!to!tackle!

such!problems.!In!spite,!greater!involvement!of!the!suppliers!seems!to!not!increase!the!performance!

of!a!project!(Wagner!and!Hoegl!2006).!

3.1.3 Customers involvement While!suppliers’!involvement!plays!a!different!role!basing!on!the!circumstances,!in!general!it!appears!

to!be!decisive! in! successful!product!development.!A!greater! involvement! lead!not!only! to!a!better!

understanding! of! the! customer’s! needs,! it! is! also! a! valuable! source! of! ideas! (Hanna! et! al.! 1995).!

Moreover,! a! successful! integration!of! the! customers! in!NPD! supports! effective! resource!utilization!

through!crossgfunctional!coordination.!

!

Relationships!with! customers! can!have!different! characters!depending!on! the! level!of! involvement!

and!the!type!of!customers!(Lagrosen!2005).!Since!the!case!study!analyzed!in!this!thesis!is!an!industry!

specific! case,! integrative) relationship)will! be! considered.! Such! types! of! customer! relationship! are!

usually! characterized! by! high! customization! of! the! design! based! on! the! customers! need! and! the!

customers!usually!expect!to!gain!performance!benefits!and!usually!are!highly!involved!in!NPD!(Ford!

2006).! OEMs! relies! on! the! effectiveness! of! their! cross! functional,! R&D! and! product! development!

teams(Hanna! et! al.! 1995),! therefore! it! is! important! to! have! a! greater! effort! in! coordination! both!

horizontally!and!vertically.!

!

Academia! proposes! several! frameworks! aimed! to! analyze! product! development! and! customer’s!

involvement.!Customer’s!involvement!can!expand!in!two!main!dimensions;!the!longitudinal!direction!

where! the! customers! interact! with! the! design! process! through! several! points! of! interaction;! the!

lateral!direction!that!measure!the!depth!of!the!interaction!within!the!customer!and!the!firm!(Kaulio!

2010).! Opposed! to! this! multidimensional! approach,! linear! models! examine! product! development!

according! to! several! consequential!phases!while!analyzing! the!customer! interaction! in!each!phase.!

There! are!many! other! tools! and! framework! focused! on!NPD! and! customers! interaction! and! it! has!

been!demonstrated!how!utilizing!these!tools!positively!affect!the!success!rate!of!the!projects!(Nijssen!

and!Lieshout!1995).!

3.1.4 Summary and relevance According! with! the! given! literature,! technological! uncertainty! affects! several! aspects! of! the!

development!of!a!company.!Several! challenges!arise!because! there! is!a!greater!need! for! flexibility,!

compatibility! with! old! systems! and! with! future! adaptation.! Uncertainty! is! directly! proportional! to!

risk,!managers!try!to!mitigate!risks!by!collecting!more!information!but!knowledge!complexity!might!


19

be!so!high!that!this!collection!will!not!benefit!the!company.!The!company!examined!in!this!case!study!

complies!with! these! two! behaviors;! for! instance,! ABB! developed!more! adaptable! grid! distributors!

and!try!to!collect!more!information!through!this!thesis!work.!

Supplier’!selection!must!to!be!performed!carefully!under!technological!uncertainty.!The!right!supplier!

with!the!right!technology!is!a!key!partner!when!the!uncertainty!is!reduced.!On!the!other!hand,!being!

stuck!with! the!wrong! supplier! can! lead! to!be!drawn!out!of! the!market.!Basing!on! this! information!

given!in!the!literature,!the!author!of!this!study!assumed!that!every!technology!considered!from!ABB!

has!equal!potential!in!order!to!mitigate!the!risk!described!before.!

Such!level!of!uncertainty!can!be!decrease!with!a!greater!involvement!of!the!suppliers!in!the!product!

development! process.! Long! term! relationships! are! also! a! valuable! intangible! asset! that! allows!

companies! to! build! a! “supplier! base”! able! to!meet! future! requirements.! On! the! other! hand,! such!

involvement!increases!the!risk!of!information!leakage!and!holdgup!problems.!It!has!been!argued!that!

reducing!the!scope!of!the!collaboration!is!a!powerful!tool!in!order!to!prevent!such!leakage.!There!is!

still!some!debate!on!what! is!the!overall!effect!of!the!Supplier’s! involvement.!Fractioning!of!the!risk!

and!competences!transfer!are!the!main!advantages!of! involving!suppliers,! information! leakage!and!

longer! development! times! are! the! main! disadvantages.! With! respect! to! the! case! study,! the!

involvement!of!the!suppliers! is!as! limited!as!possible.!Since!the!analyzed!market!emerged!only! in!a!

recent!time,!the!incumbents!are!small,!differentiated!and!are!aiming!for!a!strategic!partnership!with!

ABB!thanks!to!its!larger!size.!Therefore,!the!limited!information!flow!toward!the!suppliers!is!accepted!

as!compromise!thanks!to!the!potential!value!that!ABB!can!offer.!

While! the! effect! of! suppliers’! involvement! is! still! debated,! academia! agrees! that! customer’s!

involvement! has! a! positive! correlation!with! the! success! of! a! project.! There! are! several! degrees! of!

customer’s! involvement,! with! respect! to! this! study,! the! relation! with! customers! is! considered! as!

integrative!and!therefore!the!designed!solution!will!be!tailored!on!the!needs!of!the!customer!that!is!

the!endguser!of!the!solution.!Propulsion!systems!are!always!tailored!to!the!customer!needs!as!their!

design! is! highly! dependent! on! specific! security! requirements,! available! infrastructure! and! other!

aspects!concerning!the!management!of!the!fleet.!

3.2 Transaction costs and B2B relations Compared!to!B2C,!B2B!businesses!are!exposed!to!a!series!of!transaction!costs!due!to!inefficiencies,!

information! asymmetries! and! other! factors! that! influence! the! relationships! between! the! actors!

operating!within!the!business.!In!the!first!section!the!main!differences!between!B2B!and!B2C!will!be!

contextualized!in!a!NPD!scenario.!Later,!the!importance!of!goal!alignment,!and!the!inefficiencies!due!

to!divergence!of!the!goals!will!be!discussed.!Finally,!relationship!in!B2B!will!be!structured!according!

to!two!different!frameworks!and!their!domains!will!be!discussed.!!!!

3.2.1 Differences in NPD in B2B and B2C According! to! the! exposed! literature,! customer’s! involvement! in! NPD! poses! several! challenges! on!

knowledge!management!and,!when!appropriately!managed,!customer’s!involvement!give!an!overall!

positive!effect!on!NPD!processes;!this!effect! is!determined!by!the!fact!that!the!firm!can!exploit!the!

knowledge! of! the! customers! in! order! to! operate! a! more! “solutiongfocused”! NPD.! The! marketing!

department!plays!a!critical!role!in!the!process!of!interpreting!the!market!and!the!customer’s!needs!

which!are!the!input!for!the!whole!process(Griffin!et!al.!2013).!

!

The! background! assumption! is! that! the! customer´s! need! can! be! interpreted! and! translated! into!

quantifiable! inputs! for! the! R&D! department! (La! Rocca! et! al.! 2016).! This! assumption! is! not! always!

valid! in! B2B! business! as! the! customer! need! is! often!more! complex! and! the! products! needs! to! be!

developed!adghoc!rather!than!independently!from!the!supplier!(Chang!and!Taylor!2016).!Customers!


20

in!B2B!are!aware!of! the!technology,! informed!and!require!a!greater!degree!of! interaction!with!the!

system!developer;!the!developed!solution/system!will!be!the!result!of!this!interaction!(Håkan!1990).!

It!is!clear!how,!compared!to!the!B2C!case,!the!customer!does!not!only!give!the!knowledgeginputs!to!

the!supplier,!but!rather!participate!actively!in!the!development!and!have!a!greater!influence!on!the!

whole!process.!Therefore,!B2B!businesses!are! influenced! from!a!series!of!complex! interactions! the!

buyer!and!all!the!upstream!firms,!where!all!the!actors!interact!with!each!other.!!

!

Concluding,! while! B2C! in! characterized! by! linear! relationships! where! the! upstream! firms! try! to!

anticipate! the!customer!needs,! the!B2B! is! characterized!more!by!circular! relationship!between! the!

actors!playing!in!the!market.!

3.2.2 Aligning of the goals (Yan! and!Dooley! 2013)! analyzed! the! effect! of! goal! alignment! and! communication! in!NPD!projects.!

The!effect!of!a!greater!communication! is!dependent!on!the!magnitude!of! the!uncertainty!affecting!

the! project;! when! there! is! a! high! level! of! uncertainty,! an! increased! communication! level! will! be!

beneficial! in!terms!of!delivery!and!time!to!market,!on!the!other!hand,!when!the!uncertainty!is! low,!

the! effect! will! be! opposite.!While! the! effect! of! communication! is! variable,! according! to! (Yan! and!

Dooley! 2013)! goal! alignment! has! always! an! overall! positive! effect! in! terms! of! coordination! and!

cooperation.! At! the! same! time,! when! performed! at! an! early! stage,! goal! alignment!will! negatively!

affect! differentiation! which! is! fundamental! when! there! is! a! high! degree! of! uncertainty! (Kathleen!

1989;!Eisenhardt!and!Tabrizi!1995).!

!

Taking! into! account! the!doublegsided!nature!of! goal! alignment,! it! has! to!be! considered! that! it! not!

always!possible! to!achieve! such!alignment!because!of! several! factors! related! to!partners´! strategy,!

values,!assumptions!and!other!motivation!related!to!personal!interests!(Kathleen!1989).!According!to!

the!standard!Agency!Theory,!Goal!conflicts!can!be!configured!within!the!Transaction!Costs!domain;!

at!the!same!time,!different!actors!can!have!a!different!sensitivity!to!taking!risks,!resulting!in!greater!

misalignment!of! the!goals!and!greater! costs.!Given! these!costs,! a! series!of! inefficiencies!will! arises!

and!performance!evaluation!will!be!more!difficult!(Kathleen!1989).!!!

3.2.3 Relationship in B2B Previous!studies!(Johansson!and!Thulin!2004)!differentiated!the!relations!between!two!companies!in!

“Transactional!approach”!and!“Relational!approach”.!In!the!first!case,!the!qualities!of!the!two!parties!

are!not!directly!involved!in!the!relationship!and!the!determining!factor!is!the!price.!On!the!opposite,!

when!the!reason!of!the!relationship!has!a!higher!degree!of!complexity,!the!companies!will!base!their!

relationship!on!a!greater!exchange!of!knowledge!and!have!a!tighter!relation.!Once!the!relationship!

has!been!established!it!needs!to!be!maintained,!during!this!phase!the!focus!will!be!on!value!adding!

activities!(Day!2000).!Other!studies!(Derrouiche!et!al.!2010)!tend!to!have!a!more!“layered”!approach!

where! the! relationship! is! analyzed! basing! on! two! levels:! the! context) of) the) relationship) and! its!performance.!!

The!context!of!the!relationship!is!based!on!five!domains:!

• Climate!of!the!relation!

This!domain!contains!the!psychological!and!organizational!characteristic!of!the!relationship!that!can!

be! confrontational! or! cooperative.! In! the! first! case,! the! relationship! will! be! characterized! by!

commitment!and!confidence!between!the!parties.! In!the!other!case,!the!power!and!opposite!goals!

will!characterize!a!confronting!relationship.!

• Structure!of!the!relation!


21

The!structure!of!the!relation!defines!the!practices!and!the!duties!of!the!parties.!This!organization!not!

only! formalizes! the! responsibilities!of! the!parties,! also!defines! the! interdependencies!between! the!

companies!and!the!distribution!of!the!powers.!

• ITs!used!

ITs! like!emails!of! integrated! tools!play!a! role! in!what! is! the!success!of! the! relationship!as! it!has!an!

influence!on!the!satisfaction!of!the!parties!and!their!perception!of!effectiveness.!

!

• Lifecycle!of!the!relation!

The! relationship! can! evolve! between! different! stages! like:! Exploration,! Construction,! Maturity,!

Decline! and! Deterioration.! Depending! on! the! stage! of! the! relationship,! different! dynamics!will! be!

realized!within!the!relationship!and!on!the!degree!of!cooperation!between!the!companies.!

• External!context!

This! domain! takes! into! account! the! environment! surrounding! every! actor! like! industry,! size,!

international! environment! and! group! industries.! Even! if! the! external! context! relates! to! the!

relationships!between!the!company!and!the!environment,!these!interactions!will!inevitably!affect!all!

the!other!relations!and!their!performance.!

!

The! performance! of! the! relation! is! related! both! to! the! perception! of! satisfaction! and! the! actual!

effectiveness.! The! effectiveness! of! the! relationship! is! directly! proportional! to! the! intensity! of! the!

cooperation!and!in!turn!it!affects!all!the!other!aspects!of!the!relation.!

3.2.4 Variables of B2B relationships As!written!in!the!previous!sections,!longgterm!relationships!are!one!of!the!key!factors!in!the!success!

of! a! B2B! relationship.! Longgterm! relationships! allow! companies! to! tailor! their! products! to! the!

customer! in! order! to! increase! their! value! and! reduce! their! costs! (Bagdoniene! and! Zilione! 2009).!

When!engaged! in!a! successful! relationship,! the!parties!can! focus!on! their! respective!core!activities!

and!benefit!from!the!joint!effort!of!reaching!the!goal.!The!functions!affecting!the!relationship!can!be!

divided! in! direct! and! indirect! functions! (Walter,! Ritter,! and! Gemünden! 2001).! We! refer! to! direct!functions! to! those! that!have!a!direct! impact!on! the!partners!of! the! relationship;! indirect) functions!affect! indirectly!the!partners’!relationships.!According!to!Walter!et!al.,!nowadays!customers!have!a!

forefront!role!in!the!success!of!a!firm!and!are!a!“key!source!of!competitive!advantage”!because!they!

offer!ideas,!technologies!and!access!to!the!downstream!market.!As!a!result,!customers!have!a!central!

role!in!the!success!of!the!firm!and!longgterm!relationships!are!key!success!factors.!Previous!attempts!

to!structure!the!variables!affecting!the!success!of!a!relationship!(Castro!2005;!Biggemann!and!Buttle!

2005)! distinguish! between! these! dimensions:! time,! structure,! process,! substance! and! functions,!

value.!

• Time!

This!dimension!analyze!how!the!relations!change!over!time,!as!mentioned!in!the!previous!sections,!

there!are!several!approach! to! this!dimension! (Derrouiche!et!al.!2010;!Ford!2006).!While!proposing!

different!approaches,!academia!differentiates!between!pregstages!and!development!phases.!

• Structure!

(Castro! 2005)! point! out! four! characteristics! in! order! to! describe! a! relationship:! Continuity,!

complexity,! symmetry! and! informality.! Continuity! deals! with! the! frequency! of! the! collaborations;!

complexity! depends! on! the! number! of! partners! involved! in! the! relation;! symmetry! is! typically!

balanced! in!B2B! relations! since! all! the!partners! are!usually! informed!and!autonomous;! informality!

describes!the!degree!of!formalization!of!the!relation!trough!contracts.!


22

• Process!

Cooperation,! competition! and! coopetition! are! all! aspects! that! are! involved! in! the! nature! of! the!

relation.! Rules,! standardizations,! routines! and! protocol! are! essential! parts! of! this! dimension! that!

consider!how!the!exchanges!between!the!partners!will!occur.!

• Substance!and!function!

!The!structure!of!the!relationship!defines!responsibilities!and!duties!of!the!partners!and!the!degree!of!

definition! of! a! clear! structure! within! this! domain! is! considered! as! a! success! factor! for! the!

relationship.! The! quality! of! the! organization! determines! the! development! of! the! resources! and!

capabilities! of! the! partner! and! can! have! different! importance! according! to! the! closeness! of! the!collaboration.!

• Value!

The! value,! intended! as! difference! between! the! costs! and! benefits! is! one! of! the! key! drivers! of! the!

relationship.!In!a!broad!sense,!value!is!a!multifaceted!aspect!with!implications!related!to!knowledge,!

strategy,! finance!and!personal!development!of! the!partner.!All! these!dimensions! relate! to! the!B2B!

dimension! affecting! its! success.! The! partners! involved! in! the! relationship! attribute! a! different!

importance!to!each!variable!depending!on!their!positioning!within!the!relationship!(Bagdoniene!and!

Zilione! 2009).! The! variables,! their! dimensions! and! their! features! considered! by! Bagdoniene! are!

presented!in!table!1.!!

Table!1!Dimensions,!features!and!success!variables!according!to!Bagdoniene!(2009)!

Dimension! Features! Success!variables!Time! Experience! satisfaction,!service!quality!!

Uncertainty! trust!!

Distance! closeness,!openness,!attention,!involvement!!

Commitment! loyalty!!

Structure! Continuity! negotiation,!satisfaction,!commitment!!

Complexity! mutual!goals,!flexibility,!rigidity,!effective!

coordination!

Symmetry! power!!

Informality! knowledge!sharing,!social!exchange,!problem!

solving!!

Process! Adaptation! personal!relationships,!trust,!loyalty!!

Cooperaton!and!conflict! joint!technical!problem!solving,!reciprocity,!

continuity!!

Social!interaction! communication,!socialization,!skills!and!traits!of!

personnel!!

Routinization! faster!performance,!impact!of!technology!!

Substance!and!function! Quasigorganization! risk!sharing,!resource!allocation,!mutual!goals,!joint!

working!!

Value! Personal!value! emotional!satisfaction,!customer!retention,!

referrals!!

Financial!value! profitability,!increased!efficiency,!share!of!

business,!share!of!market,!investments!!

Knowledge!value! knowledge!creation,!idea!generation,!market!

intelligence,!innovation!!

Strategic!value! sustainable!competitiveness,!longgterm!planning,!

extended!network!connections!!


23

These! variables! can!have!different! features! that! characterize! several! aspects! of! the! success! of! the!

relationship.! At! the! same! time,! the! variables! can! pertain! to! five! different! dimensions:! Time,!

Structure,!Process,!Substance!and! function!and,! finally,!Value.!While!Bagdoniene! (2009)!consider!a!

sharp!definition!of!the!boundaries!between!two!different!dimensions!or!features,!the!variables!might!

be!considered!as!correlated!to!a!broader!extent.!The!success!of!a!relationship!will!depend!from!more!

than!one!variable!at!the!same!time.!

3.2.5 Summary and relevance As!defined!in!the!case!study!description,!the!goal!ABB!is!to!develop!a!tailored!solution!while!coping!

with!different!actors!and!shifting!requirements.!According!to!the!literature!given!in!this!chapter,!all!

of!the!actors!are!informed,!aware!and!interact!with!each!other.!Such!complex!system!poses!typical!

challenges!of!a!B2B!environment!where!the!customers’!need!cannot!be! interpreted!and!translated!

into! defined! measurable! input! at! the! beginning! of! the! development,! but! it! is! evolving! with! the!

development! itself.! Moreover,! compared! to! the! B2C! model,! where! the! “waterfall! type”! of! the!

relations! between! customers! and! supplier! is! based! on! a! clear! hierarchy,! the! case! study! must! be!

based!on!a!B2B!circular!model,!where!customers!and!suppliers!cooperate!and!exchange!information!

iteratively.!

As!stated!in!the!literature!(Kathleen!1989,!Yan!and!Dooley!2013),!communication!must!be!extensive!

when! uncertainty! is! high.! At! the! same! time,! goal! alignment! can! have! a! negative! effect! on!

diversification,! which!must! be!maintained! high! when! technological! uncertainty! does! not! allow! to!

identify! the!most! successful! technology.! These! results! suggest! that! while! this! study! examine! goal!

alignment! and! how! to! achieve! it,! communication! flows!must! be! screened! continuously.! To! some!

extent,!the!goal!that!must!be!achieved!is!an!effective!and!proficient!dialogue!between!the!actors.!

!

Given!that!the!success!of!a!B2B!project!is!based!on!the!quality!of!the!relationships!between!the!two!

companies,!the!previous!section!offered!a!framework!elaborated!by!Bagdoniene!and!Zilione!(2009)!

aimed! to! frame! the! aspect! influencing! such! relations.! These! variables! represent! one! of! the! basic!

concepts! of! this! study! as! they! the! author! will! show! later.! The! set! of! variables! proposed! by!

Bagdoniene!and!Zillone!(2009)!covers!five!different!dimensions!and!have!several!features.!While!all!

of! these! variables! have! an! impact! on! the! exchanges! between! the! companies,! the!most! important!

ones! related! to! the! specific! case! study!will!be! selected! through!a! series!of! surveys! to! the! involved!

actors.!

3.3 Integrated Product Development Integrated! Product! Development! is! an! example! of! New! Product! Development.! This! section! will!

discuss!the!factors!affecting!the!success!of!this!kind!of!projects!and!the!metrics!used!to!measure!it.!

Suppliers,!customers!and!coordination!will!be!framed!in!IPD!and!their!influence!will!be!discussed.!At!

last,!a!generic!framework!aimed!to!categorize!suppliers!will!be!defined;! it!will!show!the!differences!

between! the! different! categories! and,! concluding,! the! suppliers! considered! in! this! study! will! be!

categorized.!

3.3.1 IPD success factors When! dealing! with! greater! degree! of! complexity,! companies! make! use! of! an! Integrated! Product!

Team! (ITM)! in! order! to! achieve! a! higher! integration! of! the! system! components.! In! an! Integrated!

Product!Development!(IPD)!process,!part!of!the!system!development!is!supported!by!customers!and!

suppliers,!therefore!the!success!of!this!kind!of!projects!depends!both!on!the!technical!knowledge!of!

the!parties! and! the! coordination!between! them! (Nellore! and!Balachandra!2001).! (Bowen!H.! 1994)!

mentions! four! different! elements! of! IPD:! Joint! decisiongmaking,! Bidirectional! information! flows,!


24

Planning! and! shared! commitment;! as! a! starting! point,! the! success! of! IPD! depends! on! these! four!

factors.!

As!usual,!the!success!of!such!projects!can!be!measured!in!terms!of!time,!budget!and!compliance!with!

the!desired!requirements.!Other! factors!can!be!considered!as! fundamental! in! the!results!of!an! IPD!

process,! for! instance!marketing,! service,! aftergsale! support,! innovation! and! style.! These! functions!

interact!with!each!other!and!with!the!outcome!of!the!process!(La!Rocca!et!al.!2016).!

An!effective! interaction!between!these!functions! is!critical! in!order!to!achieve!greater!coordination!

and! reduce! the! agency! costs! mentioned! before.! The! different! actors! involved! in! IPD! needs! to!

anticipate!and!coordinate!their!respective!efforts!in!order!to!respond!to!the!high!rate!of!changes!that!

characterize!such!development!processes!(Bowen!H.!1994).!!

!

(Nellore! and! Balachandra! 2001)! argues! that! while! the! importance! of! coordination! has! been!

commonly!accepted,!there!is!a!lack!of!literature!with!respect!to!this!matter,!in!particular,!on!how!to!

obtain! such! coordination!when! customers! and! suppliers! are! involved! in! the!process.! (Lipton!1996)!

states!that!by!creating!and!enhancing!the!company!vision!it! is!possible!to!achieve!a!positive!impact!

on!the!results!of!the!development!by!giving!a!common!direction!to!the!different!involved!actors.!!

!

As! stated! before,! Suppliers’! involvement! plays! a! key! role! in! IPD,! where! the! large! number! of!

integrated! components! induces! complexity!and!uncertainty.!Moreover,! increasing! the! involvement!

of!suppliers!in!IPD!allows!the!companies!to!transfer!part!of!the!development!costs!while!maintaining!

the! quality! of! the! developed! product.! It! is! clear! how! the! suppliers’! characteristics! are! one! of! the!

cornerstones! of! the! commercial! success! of! the! developed! products! (Dowlatshahi! 1992).! The!

capabilities!of!the!suppliers!will!impact!on!the!price,!the!quality!and!the!performance!of!the!product;!

these! relationships! are! often! seen! as! vertical! and! characterized! by! exclusivity,! closeness! and!

durability!(Petersen,!Handfield,!and!Ragatz!2005).!

!

As! described! in! the! previous! section,! Supplier’s! involvement! presents!many! challenges! because! of!

asymmetric! information! and! the! fear! of! information! leakage.! These! problems! are! usually!

counteracted!with!restrictive!and!focused!actions!like!reducing!the!scope!of!the!collaboration.!On!the!

other!hand,!(Nellore!and!Balachandra!2001)!suggests!that!an!increased!technological!uncertainty!can!

induce!a!greater!degree!of!involvement!in!IPD.!!

3.3.2 Supplier classification The!degree!of!openness!between!the!supplier!and!the!OEM!has!been!codified!by!Kamath!and!Liker.!

According!to!their!structure,!the!customer!can!be!defined:!

!

• Partner!

• Mature!

• Child!

• Contractual!supplier!

!!

These! four! categories! represent! four! different! degrees! of! openness,! from! an! absolute! openness!

(Partner)!to!a!very!limited!information!flow!(Contractual!Supplier).!Partner!suppliers!are!part!of!well!

established!relationships!and!produce!components!that!are!directly!linked!to!the!catalog!of!the!OEM!

while! cooperation! with! contractual! supplier! occurs! only! in! specific! cases! and! instances.! When!

considering!how!to!characterize!a!supplier,!OEM!often!takes!into!account!the!previous!experience!of!

the! supplier,! as! it! is! used! as! benchmark! for! its! reliability! and! capacity! (Petersen,! Handfield,! and!

Ragatz!2005).!

!


25

Under! technological!uncertainty! it! is!expected! to! find!many!Contractual! suppliers.!The!adoption!of!

such! suppliers! comes! from! an! attempt! from! the! OEM! to! spread! the! risks! of! operating! with!

unexperienced!suppliers!over!many!different!actors.!At!the!same!time,!as!mentioned!before!the!risk!

of!getting!“stuck”!with!the!wrong!technology!must!be!mitigated!through!differentiation.!While!these!

critics! relates! to! the! purchase! patterns! of! the! OEM,! there! is! only! a! reduced! literature! on! the!

interactions!between!this!kind!of!suppliers!and!the!other!functions!like!sales,!marketing,!service!etc.!

3.3.3 Summary and relevance Time,!budget!and!compliance!are!the!metric!usually!employed!in!order!to!evaluate!the!success!of!a!

project,!while!other!factors!are!certainly! influencing!it.!Such!factors!span!over!marketing,!aftergsale!

services,! innovation,! style!and!so!on.!The!complex! interactions!between!these! functions! requires!a!

greater! effort! in! terms! of! coordination! in! order! to! reduce! agency! costs,! anticipate! changes! and!

respond!rapidly!to!changes.!

Such! coordination! is! often! achieved! through! increasing! the! coordination! between! the! different!

subjects,!on!the!other!hand,!while!part!of!the!developing!costs!are!transferred!to!the!suppliers,!the!

risk!of!information!leakage!increases.!It!is!important!to!identify!suppliers’!characteristics!in!order!to!

maximize!the!positive!effect!of! involvement!as! it! impacts!on!the! final!price!of! the!product!and!the!

supply!capabilities.!When!performed,! IPD! is!usually!based!on!exclusive,!close!and!durable!relations!

with!the!suppliers;!these!characteristics!enhance!both!the!risks!and!the!opportunities!generated!by!

the!collaboration,!especially!when!technological!uncertainty!is!high.!

However,!different!suppliers!will!experience!different!degrees!of!openness!from!the!OEMs!basing!on!

the!stage!of!the!relationship.!Under!technological!uncertainty,!Contractual!suppliers!and!occasional!

collaboration!will!be!present!basing!on!the!fact!that!differentiation!is!a!key!factor!for!success!of!IPD.!

Indeed,!the!case!study!aims!to!analyze!several!concurring!technologies,!for!this!reason!the!openness!

toward!the!suppliers!will!be!considered!limited!and!the!relation!will!not!be!exclusive.!

3.4 Systems of systems engineering In! this! section,! Systems! of! Systems! Engineering! (SoSE)! will! be! analyzed.! SoSE! represent! and!

expansion!of!system!engineering!and,!due!to!the!contextual!uncertainty!analyzed!in!this!study,! it! is!

considered!more!appropriate!with!respect!to!the!scope!of!this!research.!

3.4.1 Definition of System of Systems engineering The!engineering!of!complex!systems!became!more!challenging!as!new!technologies!relies!more!and!

more!on!connected)things!and!new!developments;!such! integration!process! lead!to!the!creation!of!

multiple! systems! integrated! with! each! other.! For! instance,! seaborne! transportation! and! railway!

transportation! can! be! seen! as! individual! systems! but,! when! connected,! they! operate! as! a! bigger!

system!generally!called!multimodal!transportation!system.!While!being!part!of!this!system,!a!single!

ship! can! be! seen! as! integration! of! other! subgsystems! operating! individually! in! order! to! achieve! a!

common! goal.! The! rise! of! the! Internet! of! Things! (IoT)! has! promoted! the! integration! and! the!

communications! between! these! systems,! posing! greater! demands! on! a! systemic! approach! to! the!

design! and! engineering! process.! Such! hyphened! integration! requests! a! larger! degree! of!

communication!while!posing!greater!challenges!on!the!standardization!of!such!communications.!!

!

The! approach! to! such! integrated! environments! is! referred! as! Systems! of! Systems! Engineering.!

Previous! authors! ! (Keating!et! al.! 2015)! argue! that! such!approach! is! still! at! an! “embryonic! stage!of!

development! and! lacks! of! consistent! focus”.! According! to! Keating,! current! research! focus! on! an!

Information!Technology!perspective!where!the!systems!operates!in!isolation!and!only!communicate!

to!each!other! in!other!to!reach!a!common!goal.!The!flows!of! information!within!these!systems!are!

usually!analyzed!in!terms!of!Interoperability,!System!Architecture!etc.!Again,!Keating!argues!that!the!


26

literature!lacks!of!consistency!and!focuses!on!a!too!broad!span!of!different!perspectives!as!it!is!at!its!

early!stage,!where!a!clear!direction!has!not!been!defined!yet.!

!

Over!the!years,!several!definitions!of!SoSE!have!been!given!((Sage!and!Cuppan!2001;!Lukasik!1997;!

Kotov!1997;!Carlock!and!Fenton!2001)),!within! this! research!Carlok!and!Fenton´s!definition!will! be!

utilised:!

!

“Enterprise)systems)of)systems)engineering)focused)on)coupling)traditional)systems)engineering)activities)with)enterprise)activities)of)strategic)planning)and)investment)analysis”!

!

This!definition!has!been!chosen!because,!under!technological!uncertainty!Information!disclosure!and!

technology!strategy!are!considered!the!most!critical!issues,!and!therefore!such!definitions!appears!to!

be!the!most!appropriate.!At!the!same!time,!the!relations!between!the!OEM!and!the!supplier!will!be!

analyzed!separately!from!the!relations!with!the!customers.!

3.4.2 Differences between Enterprise SoSE and system engineering Attempting!to!expand!the!applicability!of!system!engineering!concepts!to!SoSE,!academia!faced!the!

following! obstacles! related! to! the! differences! shown! in! Table! 1! (Keating! et! al.! 2015).! First! of! all,!

because!of!the!higher!degree!of!complexity!and!uncertainty!of!the!systems!of!systems!(SoS),!it!is!not!

possible!to!apply!typical!system!engineering!processes;!goals!and!structure!are!often!not!well!defined!

in!SoS,!so!system!engineering!cannot!be!applied!effectively.!This!complication!will!not!be!solved! in!

time! as! systems!become!more! complicated! and!homogeneous! requirements! are! harder! to! define.!

Requirements!cannot!be!defined!because!of!the!broader!context!involving!the!SoS,!which!is! in!turn!

greatly! influenced! by! the! context! itself.! Therefore,! the! second! limitation! is! that! typical! system!

engineering!considers!the!context!as!a!background!factor!rather!than!an!influencing!factor,!therefore!

constrains!and!objectives!must!now!take! into!account!the!context!as! their!correlation! increases.! In!

other! words,! while! system! engineering! separates! the! technical! paradigms! from! the! context,! SoSE!

must!not! (Keating!et!al.!2015).!Thirdly,!system!engineering!procedures!are!aimed!to!offer!perfectly!

balanced! and! integrated! solutions,! where! every! element! of! the! system! is! being! calibrated! and!

adapted!at!every!iteration.!On!the!opposite,!SoS!design!must!consider!the!possibility!of!discard!and!

replace! one! or!more! subgsystems.!While! system! engineering! offers! complete! solutions,! SoSE!may!

require!incomplete!solutions!to!be!adopted!for!several!reasons!related!to!time,!technology!or!other!

uncertainties.!

!

Table!2!Difference!between!SE!and!SoSE!(Keating!et!al.!2015)!

Area! System!Engineering! Systems!of!systems!Engineering!Focus! Single!complex!system! Multiple!integrated!complex!systems!

Objective! Optimization! Satisficing!

Approach! Process! Methodology!

Expectation! Solution! Initial!response!

Problem! Defines! Emergent!

Analysis! Technical!dominance! Contextual!influence!dominance!

Goals! Unitary! Pluralistic!

Boundaries! Fixed! Fluid!

3.4.3 The importance of goals in system engineering and SoSE As! stated! before,! system! engineering! deals! with! wellgdefined! bounds! of! the! analyzed! problem.!

According! to! the! academia! (Raelin! 2007),! engineering! practices! are! related! to! defined! goals! and!

problems,! that! can! be! argued! with! established! theories! and! knowledge.! When! dealing! with!

contextual!variables,!this!instance!is!no!longer!valid!because!of!the!mutability!of!the!context!and!of!

the!problem!boundaries!with!it.!Therefore,!the!specificity!of!the!system!engineering!approach!collide!


27

with!a!lowgdefined!and!ambiguous!problem!formulation!and!system!boundaries;!as!a!consequence,!a!

greater! degree! of! approximation! will! be! required! in! order! to! deal! with! SoSE! and! traditional!

approaches!will!be!less!robust!and!sufficient!(Keating!et!al.!2015).!

!

In!traditional!system!engineering,!the!focus!is!on!technical!aspect,!but!SoSE!required!the!expansion!

of! this! focus! on! contextual! problems! like! society,! politics! etc.! The! advancement! of! system!

engineering!methods! is! based! on! the! formulation! of! fixed,!measurable! and! capable! goals!while! in!

SoSE!tends!to!deal!with!goals!that!could!be!not!defined!and!sometimes!antithetic.!For!instance,!in!the!

context! of! this! study! unaligned! goal! might! be! frequent! and! the! technological! uncertainty! will!

preclude! from!a! fixed!definition!of! the!goals;! such!bland!definition!of! the!goals! and!of! the! system!

boundaries!represent!the!major!source!of!error!when!applying!system!engineering!processes!(Mitroff!

1998).!Due! to! the!mutable!nature!of! the!boundaries! in!a!SoS,!errors!might!be! introduced!not!only!

because! of! a! wrong! choice! of! the! initial! system! boundaries,! but! also! from! a! shift! of! the! system!

boundaries! due! to! contextual! effects,! therefore! such! effect! must! be! continuously! tackled! and!

mitigated!in!SoSE.!

3.4.4 Coping with complexity in SoSE Context! may! change! in! terms! of! organization,! structure,! resources,! society! and! so! on.! All! these!

aspects! are! usually! not! considered! in! system! engineering! that! usually! deals! only! with! technical!

requirements.!In!order!to!cope!with!such!complexity,!SoSE!must!involve!systematically!such!factors,!

in!order!to!guarantee!the!flexibility!of!the!system!boundaries,!so!that!the!latter!will!always!adhere!to!

the!boundaries!of!the!analyzed!system.!Since!the!final!system!will!not!correspond!to!the!initial!one,!

potential!failures!and!reconfigurations!must!be!identified!since!the!beginning,!in!order!to!guarantee!

the! flexibility! of! the! system! and! its! future! adaptation.! Such! improvement! can! be! obtained! both!

increasing! the! communication! transient! between! the! systems! and!detecting! the! crucial! contextual!

factors!affecting!the!system!boundaries!and!goals!(Keating!et!al.!2015).!

3.4.5 Summary and relevance Integration! and! communication! between! systems! are! key! concepts! of! nowadays! product!

development.! The! importance! and! the! potential! of! IoT! and!Connected) things! has! been! commonly!

accepted,! for! this! reason! the!product!developers!need! to!express! their! effort!on! coordination! and!

integration!of!different!systems!and!subsystems.!SoS!is!an!attempt!of!structuring!this!scenario!where!

several! system!are!operating!and!communicating!with!each!other.!With! respect! to! the! case! study,!

SoSE!represents!one!of!the!key!concepts!applied!to!solve!the!problem.!The!OEM,!the!customer!and!

the! suppliers! need! to! operate! independently! while! communicating! with! each! other! in! order! to!

develop! the! required! propulsion! system.! Although! they! operate! independently,! information!must!

flow!between!them!I!order!to!achieve!the!level!of!integration!required!by!the!customer.!

While! SoSE! deals! with!multiple! system! objectives! and! shifting! system! boundaries,! SE! is! based! on!

fixed!and!measurable!goals!and!system!boundaries.!Indeed,!the!case!study!shows!SoSE!characteristic,!

while! the! subgprocesses! of! the! single! actors! are! typical! SE! processes,! where! goals! and! system!

boundaries! are! fixed.! In! order! to! structure! the! problem! definition,! concepts! related! to! both! the!

disciplines!will!be!applied!therefore:!

• Every! actor! will! be! considered! as! an! isolated! system! aimed! to! reach! its! measurable! and!

defined!goals!through!its!standard!procedures.!

• The!actors!will!operate!in!a!SoSE!environment!when!interacting!with!each!other.!Therefore,!

the! communication! between! them! will! operate! as! exchanges! aimed! to! coordinate! and!

integrate!their!goals.!


28

3.5 Summary theoretical framework !

Concluding,! the!theoretical!model!exposed! in! this!section!showed!the! implications!of! technological!

uncertainty! in! NPD! Processes.! At! the! same! time,! the! influence! of! Customer! and! suppliers’!

involvement!has!been!studied! in!order! to!base!the!concept!of! Integrated!Product!Development.! In!

IPD,! customers! and! suppliers! are! actively! participating! to! the! development! process,! similar! to! the!

case!study!exposed!in!the!first!chapter.!Moreover,!the!success!factors!of!an!IPD!process!have!been!

studied.!At!the!same!time,!transactions!costs!in!B2B!relationships!have!been!explored!and!its!success!

variables!have!been!shown.!

Given! the! success! variables! for! a! B2B! relationship! and! the! IPD! success! factors,! Enterprise! System!

Engineering!has!been!studied!in!order!to!relate!both!of!the!above.!Figure!4!offers!a!representation!of!

the!theoretical!model!used!in!this!study.!

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New!Product!development!g Technological!Uncertainty!

g Suppliers!and!customer’s!

involvement!!!

Transaction!costs!in!B2B!g Differences!in!NPD!in!B2B!and!B2C!

g Relationships!in!B2B!

g Variables!in!B2B!relationships!

!!!!!!

Integrated!Product!Development!g IPD!Success!Factor!

g Supplier!Classification!

System!of!Systems!Engineering!g Differences!between!Enterprise!SoSE!and!system!engineering!

g The!importance!of!goals!in!system!engineering!and!in!SoSE!

Figure!4!Theoretical!framework!


29

4 Method This! chapter! will! complement! the! information! given! in! section! 3.2.3! and! 3.3.3.! Once! the! model!

structures!have!been!defined,!the!key!factors!influencing!the!interactions!between!the!systems!have!

been!defined.!These!sections!will!describe!the!methodology!used!in!order!to!define!the!key!factors!

and!the!logic!leading!the!modeling!of!the!system!interactions.!!

4.1.1 Answer to the research questions While! the! literature! review! offered! a! generalist! answer! to! the! research! questions,! the! model!

described! in! this! chapter! is! aimed! to! determine! a! deeper! understanding! of! the! systems! and! the!

implications!that!each!answer!has!on!the!others.!The!table!below!shows!a!schematization!of!how!the!

research!questions!have!been!explored!in!relation!to!the!key!concepts!used!in!this!study.!

!

Table!3!Scope!of!the!research!questions!

Research!questions! 1! 1.1! 2! 3!NPD! x! x! x! x!

SoSE! ! ! ! x!

Transacion!costs!in!B2B! x! x! x! !

Goal!Alignment! x! x! ! x!

4.2 Exchanges, context and goals

4.2.1 Selection of the exchange and context variables In! order! to! answer! to! the! research! questions! the! casegstudy! will! be! structured! from! a! SoSE!

perspective! and! the! exchanges! between! the! systems! will! be! evaluated! using! the! set! of! variables!

given!in!sections!describing!the!transaction!costs!in!B2B.!The!broad!variety!of!variables!given!in!the!

mentioned!section!has!been!narrowed!to!the!most!relevant!ones.! In!order!to!perform!an!educated!

selection,! a! series! of! semigstructured! interviews! have! been! performed.! With! respect! to! the! case!

study,!four!different!subjects!have!been!interviewed:!customer,!supplier,!OEM!and!policy!maker.!The!

policy! maker! has! been! interviewed! because! it! plays! a! role! in! the! contextual! environment! of! the!

system.!

The!table!below!shows!the!interviewed!subject!and!the!scope!of!the!interview:!

!

Table!4!First!interview!scope!

!

Once! the! Exchange! and! Context! variable! have! been! selected! from! the! literature! (Bagdoniene! and!

Zilione!2009),!a!second!round!of!interview!has!been!done!in!order!to!prioritize!them.!!

4.2.2 Interview process As!mentioned! in! the! introduction,! the!exchange!variables!have!been!selected!basing!on!a!series!of!

semigstructured! interviews! to! the! different! players.! Although! it! might! have! been! appropriate! to!

perform!fully!structure!interviews,!the!reduced!timeframe!available!for!this!research!didn´t!allowed!

the!formulation!of!a!thoughtful!structured!survey.!

g Suppliers’!interview!

Subject! Exchange!Variables! Context!variables!Supplier! x! !

Customer! x! !

OEM! x! x!

Policy!maker! ! x!


30

Suppliers!must!be!interviewed!in!order!to!assess!their!priorities,!their!goals!and!the!variables!leading!

their! efforts.!With! respect! to! the! case! study,! several! suppliers! have! been! interviewed! in! order! to!

determine! their! technological! development,! quotations! of! their! product! and! expectation! for! the!

upcoming!years.!The!latter!is!an!indication!of!how!the!system!boundaries!will!evolve!in!the!future!in!

terms!of!system!capabilities!and!economic!feasibility.!

g Customer!Interview!

The! customer,! intended! as! endguser! of! the! developed! product,! has! been! interviewed! in! order! to!

determine! its! operational! requirements,! its! willingness! to! pay! and! its! priorities.! Due! to! the!

technological!uncertainty!and!the!high!level!of!customization!required!by!the!customers!of!the!case!

study,!the!interviews!has!been!performed!continuously!through!the!process.!!Marine!system!design!

requires! a! series! of! design! iterations! in!order! to! converge! to! the! solution;! these! interviews! reflect!

such!iterations.!

g OEM!Interview!

The!OEM!aims! to!offer! a! complete! solution! to! the! customers!while! cooperating!with! the!available!

suppliers.!The!interviews!have!covered!a!broad!set!of!industrial!managers!like!Sales,!Marketing,!R&D,!

supply!chain!and!Technical!departments.!While!coordinating! its! functions,!the!system!suppliers!has!

to!understand!and!identify!the!system!boundaries!imposed!by!the!Policy!makers!in!order!to!design!a!

compliant!solution,!for!this!reason!the!interviews!are!also!aimed!to!monitor!and!control!the!shift!of!

the!system!boundaries!and!integrate!them!into!the!product!development.!

g Policy!maker!Interview!

The! policy!makers! have! been! interviewed! in! order! determine! the! context! variables! which! in! turn!

define!the!system!boundaries.!At!the!same!time,!the!goal!of!these!interviews!was!to!determine!the!

potential!shift!of!the!system!boundaries!which!are!imposed!from!the!Policy!Makers!to!the!different!

Systems.!With!respect!to!the!case!study,!the!environmental!regulations!issued!by!the!Policy!makers!

represent!the!contraction!of!the!system!boundaries!and!the!Incentives!represent!their!expansion.!For!

instance,!while!imposing!stricter!limits!on!CO2!emissions,!the!policy!makers!can!offer!incentives!and!

founding!to!the!development!of!new!green!technologies.!

4.2.3 Goals and priorities Given!the!set!of!variables!defined!in!the!previous!section,!every!actor!will!prioritize!them!according!

to! its! needs! and! goals.! In! a! multidimensional! space,! the! top! ranked! variable! will! determine! the!

leading!force!influencing!the!decisions!of!the!actor.!

Such!prioritization!is!determined!through!structured!and!semigstructured!interviews!with!the!actors.!

Once! the!priorities!have!been!determined,! it! is!possible! to!determine! if! there! is!an!alignment!or!a!

divergence!of!the!goals!between!the!actors.!It!has!to!be!noticed!that!two!or!more!priorities!are!not!

necessarily!mutually!exclusive!and!can!be!complementary!since!they!are!defined!with!respect!to!the!

goal!of!the!system!and!not!to!each!other.!As!an!example,!Safety!and!Cost!are!not!mutually!exclusive.!

When!designing!any!Marine!System,!safety!cannot!be!compromised!with!costs,!while!costs!has!to!be!

taken! into! account! in! order! to! maintain! the! sustainability! of! the! whole! system.! Therefore,! three!

possible!scenarios!may!occur:!

• The! actors! prioritize! the! variables! in! the! same! way.! The! top! ranked! variable! will! be! the!

driving! force! of! the! exchange! between! the! actors! and! the! goals! will! be! considered! fully!

aligned.!


31

• The! variables! are! prioritized! in! an! opposite! rank.! In! this! case,! the! goals! will! be! totally!

opposite!resulting!in!a!null!driving!force.!When!this!scenario!occurs,!the!process!will!be!static!

and!the!exchange!will!not!move!forward!in!the!product!development.!

• The! prioritization! is! “unbalanced”.! When! unbalanced,! the! variables! will! generate! a! force!

toward!one!direction!depending!on!the!top!ranked!variable.!

The!picture!below!shows!an!illustrative!example!of!the!variables!and!the!priorities:!!

Customer!Variable! Priority!Variable!1! 1!

Variable!2! 2!

Variable!3! 3!

Variable!4! 4!

Variable…! 5!

Variable!n! 6!

! !

Figure!5!Variable!and!priorities!Player!1!

!

!

OEM!Variable! Priority!Variable!1! 2!

Variable!2! 4!

variable!3! 5!

variable!4! 6!

Variable…! 3!

Variable!n! 1!

! !

Figure!6!Variables!and!Priorities!Player!2!

The! higher! ranked! variable! will! represent! the! dominant! exchange! for! the! considered! player.! For!

instance,!Figures!4!and!Figure!5!show!two!examples!of!prioritizations!of!the!variables.!According!to!

the!example,!the!customer!prefers!to!exchange!trough!the!variable!n,!the!OEM!prefers!the!variable!

4.!

The! prioritization! has! been! performed! on! a! scale! from! one! to! six.! Since! this! ranking! has! been!

performed!basing!on!a!series!of!semigstructured!interviews,!it!has!been!necessary!to!manipulate!and!

interpret!the!information!basing!on!the!table!below:!

Table!5!Description!of!the!priority!scale!

Priority! Explanation!6! The!variable!has!absolute!importance!with!respect!to!the!success!of!the!development.!Project!

goals!relate!directly!to!the!variables!with!this!priority!level.!

0!1!2!3!4!5!6!

Variable!1!

Variable!2!

Variable!3!

Variable!4!

Variable…!

Variable!n!

Customer!

0!1!2!3!4!5!6!

Variable!1!

Variable!2!

variable!3!

variable!4!

Variable…!

Variable!n!

OEM!


32

5! The!variable!has!a!very!high!level!of!relevance.!The!variables!within!this!level!are!essential!in!

order!to!continue!the!collaboration!in!the!NPD!but!are!subject!to!negotiation.!

4! The!variable!is!considered!highly!important!with!respect!of!the!development!but!it!is!subject!to!

negotiation!under!request!by!other!players.!

3! The!variable!is!secondary!but!contributes!actively!to!the!success!of!the!development.!

2! The!variable!is!not!essential!to!the!success!of!the!development!but!it´s!presence!can!have!

minor!influence!on!the!quality!of!the!development.!

1! The!variable!is!not!essential!to!the!success!of!the!development!and!its!presence!doesn´t!affect!

the!success!or!the!failure!of!the!relation.!

It! has! to! be! recalled! that! these! variables! will! be! influenced! by! Technological! uncertainty,! which!

represent!the!main!contextual!variable!of!this!analysis.!The!uncertainty!will!affect!the!ranking!of!the!

variables!given!by!the!actor,! influencing!the!decision!to!prioritize!one!variable!rather!than!another.!

Every!actor!will!react!in!a!different!way!to!this!influence!according!to!its!position!and!its!needs.!

The!exchanges!between!the!actors!will!occur!in!a!multidimensional!space!where!the!force!expressed!

by! the! alignment! of! the! goals!will! determine!whether! the! system!will!move! or! not,! and! in!which!

direction.!Depending!on!the!variable!prioritization!three!different!scenarios!are!possible:!

• When! the!actors! respectively!prioritize! the! same!variables,! the! resulting! force!will! have! its!

maximum! amplitude! and! the! system! will! move! forward! as! fast! as! possible! toward! the!

common!goal.!

• When! the! actors! respectively! priorities! antithetic! variables,! the! resulting! null! force! will!

generate!a!static!system!where!the!NPD!doesn´t!proceed!in!any!direction.!

• When! the! prioritization! is! unbalanced,! the! resulting! force! will! drive! the! system! toward! a!

determined!direction!depending!on!the!force!driving!the!relationship.!

4.3 Identifying and mitigating divergences Assuming! that!different!players!will! give! a!different!prioritization! to!each!variable,! it! is! possible! to!

define!the!convergence)area,!where!two!players!give!the!same!priority!to!a!specific!feature,!and!the!

divergence!area!where!the!actors!have!different!priorities.!Figure!6!offers!a!graphical!representation!

of!such!areas.!!!

Convergence!area! !!!Divergence!area! !

!!!!!

Figure!7!Goal!misalignment! Figure!8!Goal!alignment!after!mitigation

0!1!2!3!4!5!6!

Variable!1!

Variable!2!

Variable!3!

Variable!4!

Variable…!

Variable!n!

0!1!2!3!4!5!6!

Variable!1!

Variable!2!

variable!3!

variable!4!

Variable…!

Variable!n!


33

As! shown! in! figure6,! when! misaligned,! the! priorities! reduce! the! convergence! area,! which! indeed!

needs!to!be!maximized!in!order!to!harvest!all!the!benefit!from!the!collaboration.!Figure!7!shows!how!

a! better! alignment! of! the! goals! increases! the! convergence! area.! As! discussed! in! section! 3.2.2!

(Kathleen!1989;!Eisenhardt!and!Tabrizi!1995),!goal!alignment!is!to!be!performed!carefully,!especially!

at!an!early!stage!off!the!development!because!it!negatively!affects!differentiation,!which!is!turn!is!a!

key! success! factor! under! technology! uncertainty.! In! general,! goal! misalignment! can! result! from!

differences! in! strategy!and! risk! sensitivity! for! instance,! therefore!when!mitigating! such! transaction!

costs! the!nature!of! the!misalignment!must!be!defined.!Finally,!once!performed! the!goal!alignment!

will!maximize!the!convergence!area!and!increase!the!quality!of!the!collaboration.!

!

Concluding,!the!aims!of!this!methodology!are:!

• Determine!a!common!metrics!for!the!communications!between!the!systems!and!subsystems!

• Identify!goal!misalignment!

• Suggest!action!aimed!to!mitigate!goal!misalignment!and!increase!the!convergence!area!

4.3.1 Method and Case study As!mentioned!in!chapter!2,!this!research!made!use!of!a!case!study!in!order!to!offer!a!useful!empirical!

setting.!With! respect! to! the! case! study,! several! rounds!of! interviews!were!performed;! it!has! to!be!

noticed!that!within!a!single!round,!every!actor!could!have!been!interviewed!multiple!times.!The!first!

round!of! interviews!was!performed! in!order! to!define! the!objectives!of! the!product!development.!

Since! the! OEM! intends! to! develop! a! Marine! system! aimed! to! comply! with! the! environmental!

regulations! issued! by! the! policy!makers,! a! second! round! of! interview!was! performed.! During! the!

second! round! the! following! subjects! were! interviewed:! Sjöfartsverket,! Transportstyrelsen,!

Trafikverket! and! Miljöverket.! These! four! players! are! the! policy! makers! that! define! the! system!

boundaries!in!terms!of!emissions.!

Once! the! OEM! has! defined! the! objectives! basing! on! the! initial! system! boundaries! (Keating! et! al.!

2015),!a! fourth!round!of! interviews!has!been!performed!with!potential!customers!for!the!designed!

system! and! potential! suppliers! for! the! analyzed! technologies.! The! customers! issued! their!

requirements!in!terms!of!operation!and!features!of!the!system.!The!suppliers!have!been!interviewed!

in!order!to!perform!a!first!screening!of!the!available!solutions!with!respect!to!the!desired!features.!

These! first! three! rounds! of! interviews! were! propaedeutic! to! the! systems! and! subsystems! design,!

which! in! turns! must! account! for! all! the! interactions! and! dependencies! between! the! actors.! For!

instance,!two!suppliers!could!purchase!third!parts!from!the!same!company!in!the!upstream!market!

and!offer! two!different!prices.!Such! interactions!must!be!accounted!by! the!OEM!when!defining! its!

exchanges!with!the!suppliers.!

Once! the!systems!have!been!designed,!a! fifth! round!of! interviews!has!been!performed! in!order! to!

determine!the!goals!and!the!priorities!as!explained!in!the!previous!sections.!Such!information!must!

be!used!by!the!OEM!in!order!to!understand!and!clarify!the!context,!the!alignment!and!the!potential!

risks!of!the!development.!For!instance,!two!different!customers!may!have!the!same!risk!sensibility!or!

interact!differently!with!the!policy!makers.!

Finally,! once! the! system!has! been! designed! in! collaboration!with! the! customers! and! the! suppliers!

taking!into!account!the!issues!presented!in!the!previous!chapters!(La!Rocca!et!al.!2016)!(Chang!and!

Taylor!2016)!(Hanna!et!al.!1995),!a! final!round!of! interviews!has!been!performed!in!order!to!adapt!

the!designed!solution!and!determine!the!degree!of!convergence!toward!the!goal.!!

The!rounds!of!interviews!have!been!performed!both!via!phone,!Email,!Skype!or!meeting!in!presence!

depending!on!the!availability!of!the!interviewed!subject.!As!stated!before,!the!interviews!should!have!

been!performed!making!use!of!a!structured!questioner!but,!due!to!the! lack!of! time!and!resources,!


34

the!interviews!have!been!performed!in!an!open!form!and!notes!have!been!taken.!The!meetings!had!

duration!of!maximum!one!hour!each.!!

The! tables! below! show! the! number! of! interviews! performed! in! this! study! and! the! role! of! the!

interviewed!subjects!according!to!their!respective!agency.!

Table!6!Number!of!contacts!and!methodology!

! Suppliers*! Customers**! OEM! Policy!maker!

Phone! g! 12! g! 8!

Mail!exchange! 47! 60! 209! 6!

Skype! 1! 4! 10! 2!

Meeting!in!person! 2! g! 21! g!

*!8!different!suppliers!for!2!different!technologies!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

**4!customers!

!

Table!7!Interviewed!subjects!according!to!agency!and!role!

!Suppliers! Customers! OEM! Policy!maker!

Sales! 8! g! 38! g!

Business!development! g! g! 18! g!

Technology!manager! g! 4! 3! 2!

Environmental!department! g! 1! g! 8!

Consultant! 1! 1! g! 2!

Administrative! 1! 3! 2! 3!

!

As!shown!in!table!5,!emails!are!the!most!utilized!tool.!Although!the!number!of!emails! is!way!larger!

compared! to! the! other! tools,! it!must! be! considered! that! an! important! amount! of! email! has! been!

required!in!order!to!present!the!work!and!to!ask!the!interviewed!subject!to!collect!all!the!required!

information! before! the! actual! interviews.! Due! to! a! nongdisclosure! agreement! with! the! partner!

company,!it!is!not!possible!to!publish!in!this!report!the!content!of!the!interviews.!

!

!

!

!

!

!

!

!

!

!


35

5 Results The!results!have!been!divided!according!on!the!dimensions!of!the!variables.!Within!each!dimension,!

five! key! variables! have! been! targeted! basing! on! the! information! collected! in! the! interview.! These!

variables!have!been!then!ranked!according!to!the!methodology!expressed!in!the!previous!chapter.!

5.1 Customers !

Table!8!Customer!priorities!

! Variable! Priority!

Time! Satisfaction! 3!

!

Trust! 5!

!

Service!Quality! 4!

!

Involvement! 2!

!

Openness! 1!

!

Variable! Priority!Structure! Knowledge!sharing! 1!

!

Effective!coordination! 4!

!

Commitment! 5!

!

Power! 3!

!

Social!exchange! 2!

!

Variable! Priority!Process! Impact!of!technology! 5!

!

Faster!performance! 1!

!

Continuity! 2!

!

Joint!technical!problem!solving! 4!

!

Loyalty! 3!

!

Variable! Priority!Substance!and!Function! Risk!Sharing! 4!

!

Resource!allocation! 5!

!

Mutual!goals! 3!

!

Joint!working! 2!

! ! !

!

Variable! Priority!Value! Customer!retention! 2!

!

Profitability! 3!

!

Knowledge!creation! 4!

!

Longgterm!planning! 5!

!

Emotional!satisfaction! 1!

!

Once! the! most! relevant! variables! have! been! selected,! four! different! customers! have! been!

interviewed! in! order! to! determine! the! perspective! priorities! of! these! variables! according! to! the!

customers.!Within!the!Time!dimension,!Openness!has!been!ranked!as!most!important!variable.!The!

other!topgranked!variables!are!Knowledge)sharing,)Faster)performance,)Joint)working)and)Emotional)


36

Satisfaction.! These! results! are! based! on! the! interpretations! of! the! content! of! the! interviews.! The!interviews!have!been!documented!through!notes,!which!have!been!lately!post!processes!in!table!8.!!

5.2 Suppliers !

Table!9!Suppliers!priorities!



!

Trust! 2!

!

Service!Quality! 5!

!

Involvement! 4!

!

Openness! 3!

!


!


!

Commitment! 2!

!

Power! 5!

!

Social!exchange! 1!

!


!


!

Continuity! 1!

!


!

Loyalty! 3!

!


!


!

Mutual!goals! 2!

!

Joint!working! 3!

! ! !

!


!

Profitability! 5!

!


!


!


!

Table! 9! shows! the! results! obtained! from! the! interviews! to! the! suppliers.! Eight! different! suppliers,!

referring! to! two! different! technologies! have! been! interviewed.! After! the! interviews! have! been!

performed,! it!has!been!possible!to! identify!several!common!traits! in!the!priorities.!Within!the!time!

dimension,!the!highest!priority!has!been!given!to!the!Service)Quality!variable.!It!can!be!noticed!that!within! the! Substance! and! function! dimension,! only! four! variables! have! been! selected.! The! four!

selected! variables! represent! the! whole! spectrum! of! the! dimension! and! it! has! been! considered!

appropriate!to!cover!it!entirely.!Moreover,!even!if!the!supplier’!prioritizations!can!be!influenced!from!


37

the!type!of!technology!it!provides,!the!two!different!technologies!have!been!considered!substitutive!

of!each!other,!therefore!the!results!pertaining!the!suppliers!have!been!coupled!in!a!unique!table.!

5.3 OEM !

Table!10!OEM!priorities!



!

Trust! 2!

!

Service!Quality! 3!

!

Involvement! 4!

!

Openness! 5!

!


!


!

Commitment! 3!

!

Power! 2!

!

Social!exchange! 1!

!


!


!

Continuity! 4!

!


!

Loyalty! 1!

!


!


!

Mutual!goals! 3!

!

Joint!working! 2!

! ! !

!


!

Profitability! 4!

!


!


!


!

The!results!concerning!the!OEM!are!considered!as!the!most!reliable!since!they!are!based!on!a!larger!

number!of! interviews.!This! consideration! is!based!on! the!assumption! that!every!other!OEM!would!

operate!the!same!choices!when!faced!with!the!same!request.!Table!10!shows!the!results!related!to!

the!OEM.!Moreover,!compared!to!the!other!actors,!a! larger!number!of! interviews!covered!a! larger!

spectrum! of! company! functions,! from! Sales! to! Administrative.!When! interviewing! such! variety! of!

interviewed!subjects,! it! is!possible!to!analyze!the!OEM!as!a!whole!entity! leaving!aside!the!bias!that!

could! occur! in! a! specific! company! section.! As! an! example,! managers! from! the! Sales! department!


38

would! prioritize! profitability! rather! than! knowledge! creation.!While!managers! from! the!marketing!

department,!would!prioritize!emotional!satisfaction!instead!of!profitability.!!!

5.4 Policy maker !

Table!11!Policy!maker!Priorities!



!

Trust! 5!

!

Service!Quality! 2!

!

Involvement! 3!

!

Openness! 4!

!


!


!

Commitment! 1!

!

Power! 4!

!

Social!exchange! 5!

!


!


!

Continuity! 2!

!


!

Loyalty! 5!

!


!


!

Mutual!goals! 5!

!

Joint!working! 2!

! ! !

!


!

Profitability! 1!

!


!


!


!

Finally,! table!11!shows!the!results! related!to!the!policy!maker.! It!has! to!be!mentioned!that!several!

governmental! institutions!have!been!interviewed!and!the!result!showed!take!into!account!the!data!

given!by!the!totality!of!the!interviewed!subjects!independently!from!the!pertaining!agency.!Although!

this!approach!sees! the!policy!maker!as!a!single!entity,! some!of! the!agencies!have! less! influence!or!

less! competence! compared! to! the! others.! One!may! argue! that! it! could! be! useful! to! correlate! the!

competence! area! of! each! governmental! agency! with! one! or! more! dimension! depending! on! the!

function!of!the!agency.!The!first!approach!has!been!preferred!in!order!to!consider!the!policy!maker!

as!as!internally!homogeneous!entity.!!


39

6 Analysis and discussion This!chapter!will!offer!a!critical!analysis!of!the!results!offered!in!the!previous!section.!First!of!all,!the!

main! priority! divergences! will! be! described! and! analyzed.! Lately,! the! main! convergences! will! be!

exposed.!At! the! same! time,! also! some!minor! factor!affecting! the! relationships!between! the!actors!

will!be!described.!

6.1 Divergences Basing! on! the! results! given! in! the! previous! section,! several! divergences! emerged! between! the!

different!subjects.!In!particular,!with!respect!to!the!variables!showed!in!previous!chapter,!the!largest!

divergences! pertained! to! the!Value! dimension,!where! the! four!main! categories! interviewed! in! the!

process!attributed!the!highest!priority!to!four!different!features.!Also,!other!minor!divergences!have!

been!found,!this!section!will!offer!a!discussion!of!the!results!basing!on!the!data!given!in!the!previous!

section.!

6.1.1 Value Dimension Figure!9!shows!a!representation!of!the!priorities!within!the!Value!dimension!of!the!four!interviewed!

actors!according!to!the!model!described!before.!It!is!possible!to!notice!that,!according!to!the!results!

given! in! the! previous! chapter,! each! actor! gave! a! different! response! compared! to! the! other.! Such!

results!may!be!attributed!to!the!different!dynamics!that!affect!the!actors!within!the!different!phases!

of!the!ship!lifecycle.!

!

Figure!9!Prioritization!in!the!Value!dimension!

g Operators!

0!

1!

2!

3!

4!

5!

Customer!

retenpon!

Profitability!

Knowledge!

creapon!

Longgterm!

planning!

Emoponal!

sapsfacpon!

Operator!

Supplier!

OEM!

Policy!maker!


40

Within! the! marine! industry,! the! ship! owner! and! the! operator! can! be! two! different! figures! with!

different! objectives! and! interests.! In! particular,! when! approaching! the! costs! of! building! and!

maintaining!a!system,!while!the!ship!owner!is!mainly!focused!on!the!acquisition!costs,!the!operator!is!

more!focused!on!the!operational!costs!of!the!vessel.!Due!to!the!time!extent!of!the!operational!cost!

of!the!vessel,!the!perception!of!value!of!the!operator!relates!to!two!key!variables,!longIterm)planning!and!sustainable)competitiveness.!These! two!variables! represent! the!need!to! lower! for! instance! the!fuel! costs,! the! maintenance! and! the! other! direct! or! indirect! costs! in! order! to! maintain! the!

competitiveness! compared! to! other! transportation! systems.! As! a! consequence,!when! approaching!

New! Product! Development,! the! operator! may! neglect! factors! like! manufacturing! costs,! accessory!

services,!safety!features!etc.!The!Strategic!value!has!a!primary!role!for!the!ship!operators!in!contrast!

with!the!other!three!main!actors.!

g Suppliers!

While! the! operator! is! mainly! focused! on! the! Operational! costs,! the! suppliers! of! the! technology!

developed!in!the!NPD!process!are!mainly!focused!on!increasing!their!financial!benefits.!Profitability!is!

the! key! variable! that! drives! the! decisions! of! the! suppliers! resulting! in! decreased! efficiency! of! the!

design.!!Such!effect!is!usually!easy!to!mitigate!with!an!appropriate!budgeting!activity!that!have!to!be!

accepted! by! all! the! actors! prior! to! the! start! of! the! development.!With! respect! to! the! case! study,!

several!technologies!have!been!scrutinized!and!the!respective!suppliers!have!shown!major!focus!on!

profitability! rather! than! on! knowledge! sharing! and! strategic! partnerships! for! instance.! Taking! into!

account!the!innovative!vocation!of!NPD!projects,!such!focus!on!profitability!may!be!attributed!to!the!

need!of!these!actors!to!gain!financial!stability,!especially!in!those!emerging!markets!where!the!supply!

chain!is!constituted!by!startups!and!newly!born!companies.!

!

g OEM!

The!OEM!act!as!a!pivot!in!the!NPD!process.!Successful!integration!requires!extensive!communications!

in!order!to!achieve!the!desired!results!as!showed!in!chapter!3;!moreover,!the!SI!use!such!knowledge!

to!grow!its!expertise!and!to!expand!horizontally!within!the!market.!Given!these!premises,!the!OEM!

priorities! those! variables! that! pertain! to! the! knowledge! features! of! the! Value! dimension! like!

knowledge)creation!and!market)intelligence.!However,!as!shown!in!the!literature!review,!knowledge!sharing! does! not! necessarily! have! a! positive! influence! on! Technological! uncertainty! because! of!

knowledge! complexity.! Moreover,! all! the! other! considerations! regarding! the! management! of! the!

information! remain! valid.! Concluding,! since! knowledge! represent! have! the! highest! priority! for! the!

OEM,!it!will!be!its!responsibility!to!manage!effectively!the!flows!of!information!between!the!actors.!

g Policy!maker!

Personal! value! Environmental! policies! are! driven! by! the! need! to! promote! a! sustainable! human!

development!basing!on!the!sogcalled!three!pillars!of!sustainability:!economic,!social!an!environment.!

Basing!on!this!consideration!and!on!the!results!showed!in!the!previous!chapter,!the!priorities!of!the!

policy!maker! can!be! interpreted! in!an!effort!of! supporting!all! three!pillars!of! sustainability! ranking!

them!basing!on!a!clear!order.!First!of!all,! the!essence!of! the!regulations!resides! in! the!necessity! to!

preserve!the!environment,!therefore!the!policy!makers!will!consider!successful!every!regulation!that!

will!preserve!the!value!of!the!environment.!Since!it!is!often!difficult!to!monetize!the!environmental!

drawbacks!of!a!policy,!the!environmental!character!of!these!regulations!tends!to!be!predominant!on!

the!social!and!economic!ones,! in!order! to!guarantee!a!satisfying!result.!Secondly,! the!policy!maker!

will!value!the!social!and!economic!aspect!of!the!regulations!that!will!represent!only!a!collateral!effect!

and!will!not!be!considered!as!the!driving!forces.!


41

As!mentioned!in!the!literature!review,!the!policy!maker!is!responsible!for!the!system!boundaries!of!

the!SOSE!and!consequently!of!the!impact!on!the!other!players.!When!prioritizing!the!environment!of!

the!economic!and!social!implication!of!its!regulatory!work,!the!systems!boundaries!may!not!be!easily!

satisfied! by! the! other! actors.! For! instance,! during! the! case! study! several! technologies! have! been!

examined!and,!according!to!the!OEM,!the!lack!of!comprehensive!policies!led!to!the!development!of!

expensive!onboard!systems!that!in!turn!will!impact!the!profitability!of!the!customers.!As!an!example,!

when! developing! a! new! propulsion! system! able! to! fulfill! the! latest! environmental! regulations!

embodied!by!the!policy!maker,!the!polarization!toward!the!environment!would!force!the!customers!

to!adapt!either!a!very!expensive!technology!or!to!persecute!alternative!roads!toward!sustainability.!

The! recent! developments! of! the! sogcalled! “Dieselgate”! investigation,! where! several! automotive!

companies!have!been!accused!of! rigging! the!ECUs!of! their!cars! in!order! to!display! lower!emissions!

than!the!actual!values,!are!a!clear!example!of!how!the!environmental!priorities!of!the!policy!maker!

can!enter!in!contrast!with!the!economic!priorities!of!the!industry,!producing!undesired!results.!!!!

6.1.2 Other divergences Apart! from! the! Value! dimension,! larger! divergences! have! been! found! in! the! Structure! dimension.!

Figure!10!shows!the!results!given!in!the!previous!chapter.!

!

Figure!10!Prioritization!in!the!Structure!dimension!

While!the!value!perception!represented!the!largest!discrepancy!in!the!priorities!between!the!several!

actors!involved,!other!minor!contrasts!have!been!found!in!the!structure!and!process!dimensions.!!

In!the!structure!dimension,!knowledge)sharing!is!critical!for!most!of!the!actors!and!differently!valued!

depending!on!the!position!in!the!value!chain.!As!shown!in!the!literature!review,!knowledge!is!a!key!

driver!in!NPD!processes;!its!creation!and!the!share!of!information!are!two!pivotal!points!of!common!

0!

1!

2!

3!

4!

5!

Knowledge!

sharing!

Effecpve!

coordinapon!

Commitment!Power!

Social!

exchange!

Operator!

Supplier!

OEM!

Policy!maker!


42

product! development.!On! the! other! hand,! the! actors! tend! to! cooperate! in! order! to! split! the! risks!

among! the! parties! rather! than! for! mere! knowledge! creation! because! of! the! sensibility! of! the!

information!that!has!been!largely!explained!in!the!literature.!During!the!case!study,!the!suppliers!of!

the! different! technologies! have! shown! the! lowest! inclination! toward! knowledge! sharing.! This! is! a!

typical! holdgup! problem! where! a! player! in! the! upstream! is! unwilling! to! cooperate! with! the!

downstream! in!order! to! impede! them! to! climb!up.!As! stated!before,!while! there! are! several! tools!

aimed! to! regulate! the! relations! between! the! actors,! knowledge! sharing! and! property! remain! the!

critical!issues!in!cooperative!new!product!developments.!!

Figure!11!shows!the!results!related!to!the!Process!dimension.!In!the!process!dimension!the!impact)of)technology!has!a!different! importance! for!every!actor.!First!of!all,! the!policy!maker!gives!minimum!

importance!to!this!factor!because!it!retains!major!power!in!steering!the!development!and!the!other!

actors! are! generally! following! its! direction.! For! instance,! the! choice! of! a! certain! technology!might!

requires!the!establishment!of!a!new!infrastructure!for!bunkering!and,!while!this! is!a!major!concern!

for!the!system!developer,!this!aspect!have!minor!relevance!for!the!policy!maker.!As!an!example,! in!

the! development! of! electric! cars,! the! car! producer! is! in! charge! for! the! development! of! the!

infrastructure! needed! to! recharge! the! cars,! like! Tesla! is! responsible! for! the! building! of! the!

Supercharger) network! around! the! globe.! Secondly,! each! supplier! wants! to! define! the! standard! in!order! to! drive! the! competitors! out! of! the!market.! Since! every! competitor! do! the! same,! the! initial!

stage!of!penetration!of!a!new!technology!will!be!characterized!by!the!presence!of!multiple!standards,!

that! in! turns! represent! and!obstacle! for! the!penetration!of! the! technology.!Third,! bearing! in!mind!

that! the!OEM! is! the!main! interface! between! the! customers! and! the! supplier,! it! attributes! a! large!

importance!to!the!impact!of!the!technology!as!it!is!directly!proportional!to!the!mole!of!work!required!

in! order! to! complete! the! successful! integration.! Finally,! the! customer! is! heavily! affected! from! the!

technology!since!its!effects!will!impact!during!the!whole!utilization!period!of!the!technology.!

Concluding,! several! divergences! in! the! goals! of! the! different! players! have! been! found.!While! the!

largest!divergence!resides!in!the!perception!of!the!value,!with!respect!to!the!value!dimension,!these!

deep! differences! can! be! attributed! to! the! different! vocation! of! each! actor! that! spans! from! Policy!

makers!to!Commercial!companies.!In!general,!every!actor!tends!to!maximize!its!own!value!entering!

in!contrast!with!the!other.!Indeed,!the!cooperation!in!NPD!is!mostly!finalized!to!the!share!of!the!risk!

rather! than! of! the! knowledge! produced! thought! the! process.! For! this! reason,! also! the! knowledge)creation,! pertaining! to! the! Structure!dimension,! represents! another!divergence! in! the! goals! of! the!

different! players.! Finally,! the! impact! of! technology! also! represents! a! divergence! for! the! analyzed!

subject,!as!its!effects!are!different!basing,!again,!on!their!position!in!the!value!chain.!

6.2 Mitigation actions While!the!convergences!represent!the!strength!of!collaborative!NPD,!the!divergences!are!the!major!

area!for!improvement!that!can!be!supported!by!mitigation!actions.!

As!shown!in!the!previous!section,!the!largest!divergences!pertain!to!the!Value!dimension!where!each!

interviewed!actor!have!responded!differently!when!asked!which!of!the!different!features!of!Value!is!

the!most! important.!Such!differences!can!be!mitigated!by!creating!direct!correlations!between!the!

different! key! variables,! so! the! actors! would! operate! basing! on! mutual! interest! rather! than!

individualistic!maximization! of! the! value.! For! instance,! if! the! environmental! benefit! gained! by! the!

development!of!a!certain!technology!would!be!related!to!economic!incentives!for!the!developer,!the!

social)value!required!by!the!Policy!Maker!would!be!directly!related!to!the!financial)value)prioritized!by!the!operators.!

At! the! same! time,! the! impact) of) technology! has! a! different! impact! on! the! actors! involved! in! the!

process.!Since!these!differences!are!due!to!the!different!position!of!the!actors!in!the!value!chain,!it!is!


43

reasonable!to!assume!that!a!major!integration!between!the!actors!would!facilitate!the!reduction!of!

this!divergence.!

Finally,!knowledge)sharing!represents!the!key!issue!in!a!buyergsupplier!relation.!As!explained!in!the!literature!examined!in!this!thesis!work,!better!coordination!and!defined!sharing!policies!can!help!the!

actors!in!overcoming!such!divergence!and!improve!the!effectiveness!of!their!collaboration.!!

6.3 Convergences Among!several!variables,!the!actors!converged!on!three!variables!representing!the!core!of!integrated!

NPD:! Joint)working,! Joint) technical) problem) solving! and! knowledge) sharing.! Figure! 11! shows! such!concentration!around!these!three!variables.!

Joint) working) pertains! to! the! Structure! dimension! and! its! one! of! the! pillars! of! collaborative! NPD.!

Basing! on! the! results! given!on! the! previous! section,! all! the! actors! consider! Joint!working! as! a! key!

success!variable.!Indeed,!the!reasons!for!the!initiation!of!every!cooperative!NPD!reside!in!the!division!

of! the!responsibilities!among!the!project!members.!Product!development! is!often!characterized!by!

high!financial!risks!and!technical!risks,!for!this!reason!most!of!the!companies!seeks!partnerships!with!

customers! and! suppliers! in! order! to! decrease! such! risks.! Moreover,! when! working! jointly,! the!

different! team! members! can! easily! communicate! with! each! other! in! a! more! effective! manner!

compared! to! work! independently.! Concluding,! Joint! working! enable! companies! of! improving! the!

efficiency!of!their!process!and!reduce!the!risks!for!the!parties.!

!

Figure!11!Prioritization!in!the!Process!dimension!

Joint)technical)problem)solving!is!the!second!key!variable!according!to!the!results!obtained!from!the!

interviews.! This! variable! pertains! to! the! Process! dimension! and! represents! the! second! pillar! of!

cooperative!NPD.!When!approaching!high! level! of! complexity,! the! knowledge! required! in! order! to!

0!

1!

2!

3!

4!

5!

Impact!of!

technology!

Faster!

performance!

Conpnuity!

Joint!

technical!

problem!

solving!

Loyalty!

Operator!

Supplier!

OEM!

Policy!maker!


44

solve!technical!issues!is!too!complicated!to!be!managed!and!owned!by!one!single!actor.!Cooperative!

NPD!offers!an!advantageous!availability!of!technical!expertise!to!be!used!during!the!execution!of!the!

project.! With! respect! to! the! case! study,! technical! problem! solving! represented! one! of! the! core!

activities!of!the!study!because,!due!to!the!ambiguous!requirement!expressed!by!the!customers,!none!

of!the!available!technical!paradigms!could!be!adopted!and!a!new!solution!was!required.!Due!to!the!

technical!nature!of!the!case!study,!technical!problem!solving!has!been!one!of!the!core!activity!aimed!

to!demonstrate!the!feasibility!of!the!newly!developed!product.!!

Finally,!knowledge)sharing!represented!the!third!most!influencing!variable!according!to!the!obtained!

results.!Being!valid!all! the!considerations!given! in! the! literature!review!with!respect!of! Information)management,!knowledge!sharing!is!still!fundamental!in!order!to!achieve!success!in!cooperative!NPD.!

When!cooperating,!the!actors!have!the!chance!to!share!their!knowledge!and!to!acquire!knowledge!

from!the!other!actors!involved!in!the!project.!This!arena!gives!them!a!broad!range!of!communication!

channels! that!helps! them! in! cooperating!while! competing.! Product!development! is! a! very! sensible!

area!as! it!directly!connects!with!the!capability!of!a!company!to!compete!in!the!short!term.!For!this!

reason,! the! acquisition! of! additional! knowledge! both! on! the! competitors! and! on! the! technology!

scenario! is! fundamental! in!order!to!persecute!technological!development.!On!the!other!hand,!such!

acquisition!must!be!explicated!in!a!do)ut)des!dynamic!rather!than!in!industrial!espionage!behaviors.!

For!these!reasons,!the!actors!prioritize!the!knowledge!sharing!rather!than!the!closure,!and!move!the!

competitions!to!other!market!arenas.!

6.3.1 Other convergences Effective) coordination,! related! to! the! Substance) and) function! dimension,! also! represented! a!

convergence! point.! As! explained! in! the! literature! (Wagner! and! Hoegl! 2006),! coordination! has! an!

effect!on!buyergsupplier!relationships!that!can!be!mitigated!by! increasing!the!planning!activities.! In!

NPD! projects! it! is! not! uncommon! to! encounter! unforeseen! during! the! development,! therefore!

planning!become!more!complicated!and!exposed!to!risks.!Although!the!aim!of!risk!management!is!to!

reduce!the!impact!of!such!risks,!due!to!the!variety!of!actors!involved!in!the!process!it!is!not!possible!

to!tackle!all! the!risk!pertaining!to!the!single!project!members.!Since!the!companies!are! intrinsically!

risk! adverse,! an! effective! coordination! represents! a! key! factor! in! order! to! improve! the! confidence!

and!the!effectiveness!of!the!team.!!

!

!

!

!

!

!

!

!

!

!

!


45

7 Conclusions The! goal! if! this! thesis! was! to! offer! a! model! aimed! to! examine! the! implication! of! Suppliers! and!

customers’!involvement!in!New!Product!Development!projects.!The!issue!has!been!examined!basing!

on!the!need!of!ABB,!the!partner!company!of!this!thesis,!to!manage!its!R&D!more!effectively.!ABB!has!

expressed!the!following!issues:!

“New!power!storage!systems!and!environmental!deadlines!are!soon!to!be!implemented,!how!do!we!

manage!multiple!stakeholders!and!potential!technologies!at!the!same!time?”!

“Should! we! involve! Ship! operators! and! Supplier! of! these! new! technologies! in! our! development!

process?”!

Given! these! issues,! in! order! to! structure! the! problem,! the! following! research! questions! was!

formulated:!

1. What! are! the! implications! of! involving! the! customers! and! the! suppliers! in!NPD!projects! under!

technology!uncertainty?!

1.1. Why! the!challenges!posed!by! the! technology!uncertainty!can!be! tackled!by! increasing! the!

extent!of!the!involvement!of!the!customers!and!the!suppliers!in!NPD?!

2. What!kind!of! systemic! framework! can!be!used! for!managing!Marine! system!design! taking! into!

account!technological!uncertainty,!goal!misalignment!and!relationship!management?!

3. How!can!NPD!be!structured!in!a!SoSE!framework?!

Basing!on!the!results!of!this!work,!these!questions!could!be!answered!as!follows:!

1. Customers! and! Supplier´s! involvement! enable! a! more! efficient! NPD! thanks! to! enhanced!

Knowledge! sharing! and! Joint! working,! which! in! turns! lead! to! an! optimized! distribution! of! the!

resources!and!of!the!project!risks.!On!the!other!hand,!knowledge!leakage!and!goal!misalignment!

represent!two!important!obstacles!for!the!success!of!the!development!process.!!

1.1. Increasing! the! level! Customers! and! Supplier´s! involvement! allows! the!OEM! to!maintain! a!

sufficient!differentiation!and!to!reduce!the!risk!of!“being!stuck!with!the!wrong!technology”!

at!the!end!of!the!development!process.!

2. System!of!Systems!Engineering!can!be!used!in!order!to!structure!OEM,!Customers,!Suppliers!and!

the!Policy!maker!in!a!systemic!framework!that!takes!into!account!the!Technological!uncertainty!

as! a! context! variable,! and! the! goal!misalignment! and! the! relationships! between! the! actors! as!

exchange!variables.!

3. Considering!the!OEM,!the!Customers!and!the!Suppliers!as!parts!of!three!subsystems,!the!Policy!

maker! can! be! interpreted! as! main! force! operating! on! the! boundaries! enclosing! the! three!

systems.!Moreover,!the!three!systems!can!make!use!a!set!of!predetermined!variables!in!order!to!

manage!their!internal!exchanges.!By!doing!so,!NPD!can!be!interpreted!as!a!multivariable!System!

of!systems!which!responds!to!defined!SoSE!dynamics.!

!

!


46

Technological! uncertainty!has!been! largely! studied! from! the!academia! (Hall! and!Martin!2005;! Lee,!

Yeung,!and!Edwin!Cheng!2009)!because!of! its! impact!on!New!Product!Development.!Technological!

uncertainty! is!a!multifaceted! issue! that! can!affect! several!aspects!of! the!operations!of!a! company.!

Due!to!the!fastgpaced!innovation!that!characterizes!nowadays!industry,!it!is!of!primary!importance!to!

include! uncertainty! in! every! development! process! in! order! to! maintain! competitiveness! and!

profitability.!

Due!to!a!series!of!environmental!regulations!that!will!enter!in!force!in!the!upcoming!years,!ABB!must!

be!able!to!develop!new!marine!systems!that!can!be!lately!adapted!according!to!the!evolving!need!s!

of! the!operators.! In!order! to!do!so,! the!development!process!can!be!managed! taking! into!account!

System! of! Systems! Engineering! methodologies.! According! to! SoSE,! the! developed! systems! must!

satisfy!the! initial!constrains!of!the!SoS! instead!of!targeting!a!specific!measurable!result.!Within!this!

process,! customer!and!suppliers!must!be! involved! in!order! to! facilitate! the! integration! level!of! the!

SoS.!

Integrating!customers!and!suppliers!within!the!NPD!process!must!be!managed!in!order!to!maximize!

the! effectiveness! of! the! collaboration.! In! order! to! evaluate! the! strength! and! the! weaknesses! of!

suppliers! and! customers’! involvement,! a! series! of! interviews! have! been! performed! in! order! to!

evaluate!their!relationships!with!each!other!and!with!the!other!parties!involved!in!the!NPD!process.!

Castro,!Biggemann!and!Buttle!offer!a!framework!of!variables!aimed!to!analyse!the!success!of!a!B2B!

relationship! and! the! success! of! a! B2B! relations! has! been! directly! linked! to! the! success! of! a!

development!process.!The!variables!offered!by!the!authors!are!based!on!several!features!that!pertain!

to!five!different!dimensions:!Time,!Structure,!Process,!Substance!and!function!and!Value.!Basing!on!

this!set!of!variables,!a!series!of!interview!have!been!performed!in!order!to!analyse!the!convergeces!

and!the!divergences!between!the!actors!priorities.!

It! resulted! that! the! largest!differences! fall! into! the!Value!dimension,!where!each!of! the!actor!have!

prioritized!a!different!feature!of!the!value!and,!consequently!a!different!variable.!It!is!suggested!that!

such! divergence! could! be! mitigated! by! correlating! the! different! variables! within! this! dimension.!

Other!minor!divergences!have!been!found!in!the!Structure!dimension!where!each!actor!has!allocated!

a!different!priority!to!the!Knowledge!Creation.!Knowledge!can!be!directly!related!to!the!transaction!

cost!of!a!B2B!relationship.!Knowledge!leakages!can!be!harmful!for!the!competitiveness!of!a!company!

and! knowledge! creation! poses! several! questions! on! the! ownership! of! the! knowledge! and! on! the!

impact! of! this! knowledge! on! the! different! actors.! Transaction! costs! can! be!mitigated!with! greater!

efforts!in!coordination!and!in!regulating!the!relationship!by!making!use!of!contracts!and!agreements.!

Concluding,!ABB!could!use!SoSE!in!order!to!manage!its!internal!R&D!process!and!the!involvement!of!

customers! and! suppliers.! In! general,! SoS! can! help!OEMs! in! dealing!with! uncertainty! thanks! to! the!

concept! of! fluid! boundaries.! As! a! consequence,! the! integrated! system! will! benefit! of! greater!

flexibility!while!complying!with!the!requirements!given!by!the!customers!and!the!suppliers.!!

7.1 Limitations The! results! given! in! the! dedicated! section! are! based! on! a! series! of! semigstructured! interview!

performed!along!the!study.!In!order!to!have!a!more!reliable!and!consistent!model!the!results!should!

be!based!on!structured!interview!(i.e.!surveys).!Unfortunately,!the!time!resource!is!not!sufficient! in!

order! to! create! such! structured! interviews! and! the! analyzed! sample! is! not! big! enough! to! clearly!

assess!the!external!validity!of!this!study.!

!

Concluding,!future!study!should!focus!on!a!preventive!supplier!selection!and!how!it!affects!the!later!

stages! of! the! process.! Moreover,! the! study! has! to! be! repeated! making! use! of! fullygstructured!

interviews!and!larger!samples.!!When!proceeding!with!the!methodology!exposed!in!this!report,!it!is!


47

responsibility! of! the! interviewer! to! drive! the! conversation! and! to! post! process! the! data;! such!

procedure!could!introduce!a!systematic!error!in!the!data!if!the!interviewer!is!biased.!

8 Future Research This!work! is!based!on!a!case!study!offered!by!a!partner!company!and! its! internal! reliability! is!high!

thanks!to!the!resources!offered!by!the!company.!On!the!other!hand,!it!is!suggested!that!the!number!

of! customers! and! suppliers! interviewed! in! the! process!must! be! increased! in! order! to! improve! the!

external! reliability! of! the! study.!Moreover,! the! results! given! in! the! related! section! are! based! on! a!

series!of!semigstructured!interview.!Although!these!kinds!of!interviews!allowed!the!author!to!collect!

a! greater! amount! of! information,! it! would! be! appropriate! to! repeat! the! study! making! use! of!

structured!interviews!in!order!to!enable!a!statistical!evaluation!of!the!results.!

!

!

!

!

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