Managing Supply Risk with Early Supplier Involvement: A Case Study and Research Propositions

Abstract

Summary While there have been numerous reports of benefits associated with adoption of early supplier involvement (ESI) in product design, particularly in reducing the duration of the design process and improving design outcomes, this study extends a recent stream of research indicating that ESI may be a useful tool for managing supply risk. Utilizing a case‐study approach, the current research explores the extent to which ESI reduces the likelihood of supply disruptions and other negative supply events for an aerospace supplier. Although initial adoption of ESI was intended to reduce supply costs, results indicated that ESI serves to reduce perceptions of supply risk at this firm. Factors associated with risk reductions are discussed in the context of agency theoretic variables, and a series of research propositions are presented to build theory in supply risk management.