Organizations are encouraging collaboration among related functions within the enterprise, such as the research and development (R&D) or product engineering group and the procurement group. Organizations encouraging collaboration between the R&D function and suppliers can take advantage of benefits such as a reduction in the total cost to manufacture a product or easier sourcing of components. Involvement of the R&D function in supplier selection and appraisal can lead to lower procurement costs. However, these benefits may come at the expense of some aspects of procurement efficiency.
This article first appeared in the May/June 2016 issue of Supply Chain Management Review.