An outsourcing model for lead users: An empirical investigation

Al Zu’bi, Z.; Tsinopoulos, C.

Abstract

Product development costs have been increasing constantly over the past few decades. Outsourcing some or all of the new product development (NPD) activities to external parties is increasingly becoming a popular option in the quest to reduce costs. Lead users (LUs), a special group of users that experience needs earlier than the public, have been identified as an important source of innovative ideas. In this article, we explore and compare the cost impact of outsourcing activities to LUs relative to in-house NPD. Using survey data from 376 European manufacturers, we show that LUs’ impact on cost reduction is higher than that achieved through higher performing in-house NPD teams. The unique attributes of LUs make them a favourable outsourcing partner of NPD activity that can help reduce costs whilst increasing an organisation's innovative ability. The reduction in costs is a combination of the information sharing benefits achieved through in-house NPD and the outsourcing of NPD activities to LUs.

Citation

Al Zu’bi, Z., & Tsinopoulos, C. (2013). An outsourcing model for lead users: An empirical investigation. Production Planning and Control, 24(4-5), 337-346. https://doi.org/10.1080/09537287.2011.648485

• Journal Article Type: Article
• Acceptance Date: Nov 10, 2011
• Online Publication Date: Jan 31, 2012
• Publication Date: Apr 1, 2013
• Deposit Date: May 3, 2011
• Publicly Available Date: Feb 11, 2014
• Journal: Production Planning and Control
• Print ISSN: 0953-7287
• Electronic ISSN: 1366-5871
• Publisher: Taylor and Francis Group
• Peer Reviewed: Peer Reviewed
• Volume: 24
• Issue: 4-5
• Pages: 337-346
• DOI: https://doi.org/10.1080/09537287.2011.648485
• Keywords: Outsourcing, In-house new product development, Lead users, New product development costs.
• Public URL: https://durham-repository.worktribe.com/output/1532225