Optimal Formation of Supplier Network for Product Design Phase to Realize an Evolving Product Family

Due to rapid changes in end-user requirements and vast improvements in technology, many product development companies identified strategies like time-to-market (TTM) compression and product family development as critical for attaining success in today’s hyper-competitive environment. Further, the companies are increasingly investing on involving suppliers in various activities of a product realization process. The present paper facilitates this trend of the market by adopting supplier involvement in product design phase. Product design phase has been chosen because 70–80% of the product cost is locked in during this phase. A methodology for optimal supplier network formation is proposed so that the product development projects are completed on time and on budget, while catering to the evolving end-user requirements over a given planning horizon. The present methodology selects the detail design of the product families while forming the supplier network. In this methodology, apart from cost and time, inter-supplier communication has been modeled as one of the supplier selection criteria. This criterion is based on the effect of product architecture on integrator-supplier-supplier communication and the nature of supplier organization. The present problem has been illustrated using the case example of insulin delivery device product families and the proposed methodology has been solved using a goal programming approach.