The document discusses the different needs and skills required for purchasing related to new product development versus general purchasing. It notes that new product development purchasing requires a strategic business view, the ability to translate technical needs into business terms, and flexibility to develop new suppliers. It recommends not fully integrating new product development purchasing with general purchasing and instead having a director-level leader reporting to the CPO, with their own budget and metrics to track success.

1. Different Needs and Skill

2.  Reduce development cycle time
 Speed up scalability to mass introduction
 Deliver fantastic technology
 “Design in” total cost targets and margins

3.  Cost per unit
 Maintain production schedules
 Inventories
 Quality
 Supplier consolidation
The key factors here do not align with those
critical for Purchasing for New Products and
Engineering

4.  Strategic Business view
 Ability to translate technical/design needs into
business terms for Sourcing
 Ability to identify and facilitate technical
partnerships with supply base
 Flexibility to identify and develop new suppliers
 Understanding of capabilities of existing
suppliers
 Willingness to allow technical and design teams
to lead within boundaries of project while
guiding towards goals
 Sense of humor

5.  Best NOT to integrate with general
Purchasing on day to day basis
 Leader should be Director Level Purchasing
leader reporting to CPO
 Share resources with general Purchasing but
may locate with development teams
 Needs budget for travel and supplier
development including funds to cover
peripheral support from Quality and others as
needed

6.  Purchasing should keep the metrics for
Engineering/Development Purchasing projects
 Total project cycle time
 Initial cost to plan and ongoing margins
 Technologies introduced
 Peer review
 Tracking of new suppliers v. using existing suppliers
 Overall success of projects