Beyond buying bytes: Complementing agile new product development with an agile procurement process

Abstract

Agile methodologies are widely employed in new product development (NPD) projects characterized by high task interdependence and uncertainty, in both in-house and outsourcing contexts. In outsourcing scenarios, however, the benefits of an agile NPD process are often hindered when paired with traditional procurement processes due to misalignments with (1) the agile NPD process itself and (2) the contingencies of high task interdependence and uncertainty. To address these misalignments and enhance NPD goal attainment, this study set out to develop an agile procurement process. Employing a design science approach, the research incorporates insights from 23 interviews with experts in procurement, research and development (R&D), and suppliers, alongside a case study to implement, evaluate, and refine the proposed design. The proposed agile procurement process purposefully restructures procurement into two phases – a pre-development phase and a during-development phase with iterative cycles – which reduces costs, accelerates time-to-market, and improves quality. The results contribute to the literature by developing mid-range theory, elaborating on contingency theory and assessing its applicability to this problem, and applying agility in its original conceptualization to procurement and supply chain management.