Question 16

Explanation

Suppliers involvement in ESI can vary from “0 to full” responsibility depending on customer relationship and trust towards supplier. The lowest level of supplier integration in new product development is naturally no involvement at all.

In the spectrum of supplier integration the “None” level includes the situations where the supplier has no involvement in the customer’s product development, but merely supplies the needed parts or products according to the specifications provided by the customer.

When the situation moves to the level of “White Box” involvement, the supplier is consulted informally in the customer’s product development process. There are discussions about specifications and requirements between the supplier and the customer, but the customer still makes all the decisions concerning the design and specifications.

When moving towards the “Grey Box” level, the joint development activity between the supplier and the customer becomes more formalized. There can also be information and technology sharing, and joint decision making concerning the design and specifications.

When the supplier involvement grows near its highest levels, the level of integration becomes the “Black Box” level. This means that the design becomes primarily supplier-driven, and is based on customer’s performance specifications. The supplier is informed of customer requirements, and then is given almost complete responsibility of the purchased item, whereas the customer’s role is mostly to review and accept the purchased item’s specifications.

Reference: CIPS L4M6 study guide page 98-99 / The new syllabus 2024

LO 2, AC 2.3