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International Journal of Engineering, Science and Technology

Vol. 5, No. 2, 2013, pp. 49-64

2013 MultiCraft Limited. All rights reserved

Benefits of aligning design and supply chain management

A. Brun1*, S. Bolton2, C. Chinneck3
1*

Department of Management, Economics and Industrial Engineering, Politecnico di Milano, ITALY

2
Centre for Competitive Creative Design, Cranfield University, UNITED KINGDOM
3
Centre for Competitive Creative Design, Cranfield University, UNITED KINGDOM
*
Corresponding Author: e-mail: alessandro.brun@polimi.it, Tel +39-02-23992799, Fax.+39-02-23992700

Abstract
Supply Chain Management (SCM) is a cohort of tools and techniques supporting effective management of operations
(logistics and production activities) along the whole supply chain. Demand Management (DM) is now a multifaceted discipline
with tools and techniques that are used to align design with corporate strategy, manage quality and consistency of design
outcomes across businesses, create new user experiences and differentiate organizations products and services against
competitors. In this scoping paper, we argue that the role of a design and supply chain manager is distinctive but interconnected
within front-end product-focussed manufacturing activities. It is at this stage that we believe DM and SCM should be better
aligned in order to help firms to be more successful in their efforts to identify new product opportunities. This paper discusses
the research findings from the review of five companies to help better understand current practices, identify emerging problems
associated with the misalignment of DM and SCM, and to gain insights on the tangible benefits of better integration of DM and
SCM within front-end activities. The paper concludes by establishing a clear and focussed future research territory informed by
the case study findings.
Keywords: Design Management, Supply Chain Management, Alignment, Differentiated Innovation
DOI: http://dx.doi.org/10.4314/ijest.v5i2.4S
1. Introduction
Modern design and supply chain management are relatively new domains of scientific research in the development of
management practices. After Forrester seminal work (1961), first papers mentioning Supply Chain and Supply Chain Management
actually appeared in the 80s, with Kraljic arguing that, purchasing must become supply management (1983), while Oliver and
Webber advocated Logistics being elevated to loftier, strategic levels to become Supply Chain Management (1982). Parallel to
these activities in the early 1980s, key players such as Farr, Alexander and Gorb started to see the role of Design Management
(DM) as a potential strategic asset for businesses (Cooper and Press, 1995). Three decades later both DM and Supply Chain
Management (SCM) have evolved.
The value of design for front-end product development has been increasingly recognised (Verganti, 2009) as well as it being
identified as an essential aspect of product innovation (Perks et al, 2005). The effective use of design can contribute positively to
business performance (Bruce and Bessant, 2002; Chiva and Alegre, 2009). Perks et al, (2005) have identified three possible roles
for design: (1) design as a functional specialism; (2) design as an integrated multifunctional team; and (3) design as a product
innovation process leader. The use of design and designers to help transfer and integrate knowledge has also been argued (DellEra
and Verganti, 2009). Designs ability to help organizations to strategically and tactically differentiate, integrate and transform
innovation opportunities is well established (De Mozota, 2002). Lockwood and Walton (2008) argue that when business objectives
and appropriate design strategies are aligned, the combined capabilities area is a powerful force.
The first step of the New Product Development (NPD) process (the so called fuzzy front-end) determines which projects will
be executed. Quality, costs, and timings are mostly defined during the front-end. At this early stage, the effort to optimize is low

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50

and effects on the whole innovation process are high (Smith and Reinertsen, 1991; Verganti, 1999). It is at this stage that we
believe DM and SCM should be better aligned in order to help firms to be more successful in their efforts to innovate.
The role of the design and supply chain managers are distinctive but interconnected within a product-focussed manufacturing
context. The design manager is requested to design and develop new products that create value, differentiates themselves from
competitors, maximises company capabilities and resources to deliver the business objectives. The design manager needs to ensure
quality and consistency of design outcomes across the company and innovatively use internal and external capabilities in new
ways to deliver innovation and commercial success.
The supply chain manager is generally given a product (or range of products) which the company wants to market and
provided with information which enables him to forecast future demand and identify networks of production and warehousing
facilities, either owned by their own company or by third parties. The supply chain manager has the role of coordinating the
activities of a number of actors, all along the supply chain, in the realization of a production and distribution plan that fulfils
market requirements. This role requires a profound knowledge of capabilities and resources of the involved actors. Should this
kind of knowledge be available at the fuzzy front-end, it might dramatically help to unlock new product development
opportunities, and to avoid risks of selecting not-viable options. This latter concept indicates that the benefits of better alignment
between DM and SCM could be an interesting and still quite unexplored research domain.
In a sport analogy, we argue that the DM and SC manager are like a manager and coach of a football team. They devise the
best strategy and tactics to play against an opposing team, assigning roles and positions on the pitch to every player in order to
coordinate them towards a common goal. In this analogy, the players are the company assets (production facilities, product range,
but also suppliers and other partners along the Supply Chain), while strategy and tactics are the DM and SCM tools and
techniques. The problem is that even the most sophisticated strategies will not help improve performance if your team is a bunch
of amateur players, especially when playing against an all-stars team. That is like saying that a supply chain made up by poorly
performing suppliers will never be a winning one, even applying the most sophisticated Supply Chain Planning and Control tools.
The team realised that by attempting to align DM and SCM within the front-end product design development (PDD) process
was like encouraging a football team manager and coach to:
-

Study the strengths of current teams players as a whole and devise how more can be achieved with them
Identify weak positions and look for potential new players, months in advance before the beginning of the season
Make the team more competitive by improving the approach to how they play the game, not just in terms of sheer results
but also in terms of playing in a more attractive style
Improve team spirit and develop a shared sense of purpose

Talented players like high-quality resources in a Supply Chain are paramount to achieving good results (Brun and Pero,
2011), however there is no such thing as a best location for a plant or the best supplier. The same site for a final assembly plant
could be described as good or bad depending on a distribution chain's specific needs. Accordingly, purchasing from a supplier with
scarcely used production resources could result in the process becoming overly expensive, yet the same supplier could play a
strategic role when it comes to creating volume flexibility to exploit upcoming market opportunities (Lee, 2004; Swafford et al,
2006). Similarly product design features that are popular in one region (Europe) are not guaranteed to deliver success in another
(Asia).
Therefore, improving team spirit, seeing issues and opportunities quicker and moving earlier - namely, before the beginning of
the season - could help remove constraints (if the team budget allows it of course) and improve the quality of play, thus creating a
more competitive team. We believe this to be a real shift of paradigm:
-

The old paradigm is represented by a traditional sequential approach where SCM starts when design ends: SCM strives to
maximize logistic performance to produce and market a given (i.e. already designed) product range; with DM trying to
maintain quality and consistency of design outcomes throughout its development. This traditional approach has frequently
led to a conflict of ideas and beliefs, leading to missed communication and opportunities - misalignment. In the proposed
football analogy, this would be like improving the performance of an existing team by getting the players to know their
best positions, to play more as a team and being more resilient in tougher games.

In the new paradigm SCM and DM are adopted earlier in front-end product design and development activities, as early as
the idea management process, where design requirements, manufacturing opportunities and constraints are communicated
earlier in the process. This new approach is a structured way for using supplier skills to identify innovation opportunities,
screening concepts (taking into account supply chain constraints) and aligning design and operations. In the football
analogy, this corresponds to developing a more competitive style of play, where the manager and coach introduces new
players to maximise team strengths, enabling them to play the game in a more balanced and attractive way.

The purpose of this scoping paper is to identify current gaps in the academic literature and explore the associated spaces
through a series of five cross-category explanatory case studies. These case studies aim to identify the problems and impacts

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associated with the misalignment of DM and SCM and gain insights on the tangible benefits of better integration of DM and SCM.
This is discussed within the context of front-end activities in order to establish a clear and focussed future research territory.
This paper is relevant to academics and practitioners who operate in product-focussed manufacturing contexts, where design
attributes, material qualities and manufacturing processes are essential factors in achieving market success. As shown by previous
research, such contexts as the fashion and luxury industry proved to be an extremely promising field of application (Brun et al,
2008; Brun and Castelli, 2008; Castelli and Brun, 2010). Interaction currently takes place in practice between DM and SCM, but
there is presently a lack of detailed understanding of these best practices due to a shortage of descriptive studies in current
publications, particularly in the field of DM.
The paper is structured as follows, Section 2 provides a concise literature review to help define the scope of our research and
highlight current gaps in existing scientific research; Section 3 discusses the methodology that has guided the research study. The
findings from five exploratory cross-category pilot case studies are detailed and presented in Section 4; two case studies highlight
the problems of misalignment and three feature the benefits of aligning DM and SCM. The final section 5 presents the discussion
and conclusions of this scoping project, concluding by outlining potential future research directions.
2. Literature Review
A succinct literature review is presented that defines both supply chain management (SCM) and design managements (DM)
functions and primary benefits. The reviews main focus is on presenting and discussing the potential benefits and impacts of
aligning design and supply chain management practices in relation to front-end product development activities.
2.1 Supply chain management: We define a supply chain (SC) as a network of production sites, warehouses, distribution centres,
and final retail outlets, which are geographically distributed. Each node within the supply chain forwards the process of raw
material and component procurement, physical transformation of parts into sub-assemblies and into finished products while finally
delivering the products to final customers. This is a physical definition of Supply Chain, in line with many early works (Lee and
Billington, 1992; Swaminathan et al, 1996), and opposed to logical definitions of Supply Chain (such as the one in Womack and
Jones, 1996), considering the SC as composed by flow of orders and/or that of materials rather than the physical sites constituting
the network (or chain).
Throughout the second half of the twentieth century, managers became increasingly aware that being able to react to changes in
customer needs and wants is paramount for a firm aiming to survive in an ever more fierce competitive arena. Now that firms have
to react to a fast moving market, the ability to manage, in a co-ordinated fashion, a set of interdependent activities, which extend
far beyond the boundaries of the single enterprise is becoming vital (Cooper and Ellram, 1993). Christopher (1982; 1993) was
among the first to argue the strategic role of logistics, while Cooper and Ellram preached the shift of paradigm from traditional
channel logistics to Supply Chain Management.
The literature on supply networks, supply chains, supply management and supply chain management encompasses an
extremely wide panorama of books and papers, as a result of the research effort carried out since the publishing of the first papers
in the early 80s (Christopher, 1982; Oliver and Webber, 1982; Kraljic, 1983). As discussed in a recent literature review
(Giunipero et al, 2008), academic studies on SCM focus on a variety of domains, ranging from ICT systems to physical logistics
and distribution management, to planning, to supplier relationship management.
Today more than ever, managers up to CEO level are conscious that attaining an efficient supply chain management system is
important for their firms (Cooper and Ellram, 1993). They are becoming more aware of new prerequisites for survival (Lee, 2004)
and are striving to measure performance at the supply chain level (Ittner and Larcker, 2003; Brun et al, 2009). In the following
section 2.3, we will see how research on Supply Chain Management is more and more hybridising with researches from other
disciplines.
2.2 Design and design management: Design in its integrative capacity is a resource that can improve new product development
processes, user-orientated models and fuzzy front-end activities (De Mozota, 2008). The fuzzy front-end, a term made popular by
Smith and Reinertsen (1991), is considered as the first stage of the New Product Development (NPD) process, or what Murphy and
Kumar (1997) call the start date of team alignment. Designs importance to fuzzy front-end activities are based on its ability to
play an active role in making direct contact with customers and end users to unlock hidden innovation.

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Figure 1. Design business relationship

The integration of design thinking into organizational innovation processes is now becoming more critical to business success
(Brown, 2009). This belief is reinforced by Neumeiers (2009) assertion that innovation is a numbers game, with the winners being
the companies that can increase the total number - if not the percentage - of viable options (see Figure 1). De Mozota (2008) early
cites design as a source of increased sales, better margins, improved brand value, greater market share, better return on investment
(ROI) and deliverer of socially responsible design. Designs importance to business growth can be attributed to five interrelated
factors:
1.
2.
3.
4.
5.

Design has the potential to bring to bear the tactical delivery of improved performance and company growth through
innovation;
Design has the ability to help organizations to differentiate, integrate and transform innovation opportunities into
competitive advantage, helping organizations to distinguish themselves as superior to others;
Design thinking has the capability to help solve complex problems and increase the likelihood of more compelling,
creative and disruptive ideas;
Design has the capacity to help improve an organizations ability to cope with change, interpret new markets and help
them review their position within new and emerging markets;
User-centered design approaches have the capacity to develop a deeper understanding of users at the fuzzy front-end,
enabling organizations to unlock hidden innovation.

No single definition exists for design management (Cooper et al, 2008). This is partially owing to the fact that DM
encompasses several different design disciplines, ranging from product, environmental, information, identity and service design. In
addition DM has also started to encompass business design innovation, also referred to as design thinking. What is common is that
DM aims to link design to business and vice versa (Topalian, 2003; Boria de Mozota, 2003), with the Design Management
Institute defining design management as the business side of design (Design Management Institute, 2012).
DM has evolved from a project management function into a strategic tool. London (2002) advocates that the role of design
management is responsible for defining product values to be met, translating them into a design brief and guiding designers
understanding of the requirements. In organizations that see the design as an asset, DM now operates at an operational, functional
and strategic level according to Cooper et al, (2008), contributing to the value of the business through building brand equity,
differentiation and product quality.
DM techniques help organizations to align their business objectives to their design strategies in order to generate multiple
solutions, thus enabling more strategic choices to be made for the business (see Figure 1). Tactically, DM plays a crucial role in
managing the quality and consistency of design across the spectrum of a companys outputs - ranging from products, to the brand
identity through to communication materials. DM activities and techniques also aim to deliver new consumer experiences and
differentiated concepts (products and services) that create value.

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Figure 2. DM and differentiated innovation

These core activities of alignment, management and enhancement, correspond with SCM objectives. When focussing on
product design management, the potential synergy with SCM becomes stronger. DM in a product-focussed manufacturing context
concentrates on creating differentiated concepts that require strong interaction with research and development, manufacturing and
marketing to maximise internal and external capabilities and opportunities (see Figure 2). It is in this domain where improved DM
and SCM can create added value.
2.3 Aligning design and supply chain management practices: The critical role of suppliers in product development activities has
long been recognised and analyzed as a potential source of innovation for many years (Von Hippel, 1987). Literature on the topic
is extensive and encompasses a number of different streams of research that have been investigated from both an innovation
management and supply chain management perspective. Several differences can be identified from the emerging streams of
research. For instance, research into SCM and Operations Management (OM) contributions have recently focused on the analysis
of how to shape buyer-supplier relations to improve process efficiency more than product effectiveness (Van Hoek and Chapman,
2006) while in the innovation management stream, current contributions are looking at a broader set of performance parameters
but tend to focus on single project-based innovation activities. Despite these differences, a growing integration between the two
fields of research has been observed and some recent contributions are stressing the importance of aligning SCM and product
innovation activities (Pero et al, 2010) along with integrating design and other processes within companies and supply chains
(Khan and Creazza, 2009).
An observed trend in product design and development processes is the increasing reliance on external resources. As far as
R&D and technology management activities are concerned, the increasing relevance of external sources of innovation has been
reflected in the open innovation paradigm (Chesbrough, 2003; Gassmann, 2006). Given this trend, several authors have analyzed
the so-called develop or buy decisions. These decisions are typically made when aiming to design and develop an existing
product or component (Ulrich and Ellison, 1999).
Handfield et al, (1999) have identified a series of drivers to support managers when choosing whether to involve a supplier
earlier or later on during the NPD process (e.g. product complexity, kind of relation with the supplier). Early Supplier Involvement
(ESI) literature identifies a positive impact on performances even though some results are contradictory (Hartley et al, 1997). The
level and depth of supplier involvement and responsibility are critical decisions that an organization has to make when selecting
and attempting to embed suppliers within NPD processes, and has been explored in depth via key studies by Spina et al, (2002),
Roy et al (2004) and Petersen et al, (2005). In addition, Handfield and Lawson (2007) conducted a study with 134 industrial firms
and proposed that early supplier integration (ESI) in product development is an important coordinating mechanism for decisions
that link product design, process design, and supply chain design together.
Lack of integration with suppliers can result in problems concerning the continuity and the quality of supplies, which are
crucial factors for companies. Their analysis showed that there can be major benefits for companies through coordination and the
sharing of concepts and information in achieving agility (Khan and Creazza, 2009). An aligned SCM-NPD process has several
benefits including increases in the companys capability to react and reduces inefficiencies in the supply chain, such as excessive
inventories, withdrawals, and mark-downs or lost sales (Khan and Creazza, 2009).

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Khan et al, (2012) conducted a fashion retail case study which found that aligning product design and the supply chain was not
only important for improving competitive advantage, but also greatly improved supply chain resilience and responsiveness. The
authors state that supply chain responsiveness can be enhanced by reducing non-value adding activities, compressing time to
market and working more closely with strategic partners (Khan et al, 2012). In their case, aligning design and the supply chain
improved supply chain resilience by expanding and internalising the design process to work closer to procurement teams and other
key business functions.
Misalignment between product design and the supply chain should be improved in order to leverage supply chain capabilities,
enhance the effectiveness of new product launch and improve firm performance (Van Hoek and Chapman, 2006). The alignment
between NPD and SCM has been suggested to lead to an improvement in supply chain performance (Caplice and Sheffi, 1994).
For example, delivered variety is the number of different products delivered by a company to the market and is defined in
relationship to efficiency and responsiveness (Brun and Pero, 2012). If the delivered variety does not keep pace with the
customers orders, then the firm can face backlogs, stock-outs or overstocks (Pero et al, 2010). Practices and tools such as VMI
(Vendor-Managed Inventory) or information sharing are recommended to achieve a higher level of collaboration and integration
between the client and their suppliers (Hill and Scudder, 2002).
Design plays a strategic role which impacts the total supply chain (Abecassis, 2006; Ragatz et al, 1997) and is much more than
creating novel ideas or making aesthetic product changes (Khan et al, 2012). Empirical results by Caridi et al, (2008) show that an
increased innovativeness of NPD projects results in higher complexity due to the configuration, collaboration and coordination
required along the supply chain. Pero et al, (2010) suggest that firms striving for NPD-SCM alignment should never set the values
of product design variables at levels calling for the highest supply chain complexity. They go on to state that in order to achieve
alignment, firms may not only match product features with the supply chain, but also long-term (supply chain configuration and
collaboration) and short-term decisions (supply chain coordination). This is referred to as internal alignment (Pero et al, 2010).
3. Research scope, aim and methodology
Based on the evidences from the existing literature, we decided to launch an interdisciplinary research project to investigate the
benefits of better integration between product design and supply chain activities. This involved putting together teams of experts in
the domains of Design Management (UK) and Supply Chain Management (Italy). This cross-disciplinary team started from the
assumption that design is aimed at creating value; on the same level, all of the activities along the supply chain are also meant to
add value whilst delivering products or services to final customers. Therefore with co-creation, DM and SCM can work together
to generate even greater value.
The bringing together of DM and SCM disciplines highlighted the need to comprehend each others vocabularies and
languages, an important issue which has been identified by several authors. During the evaluative brainstorming sessions of the
pilot study data, the group used analogies such as the previously discussed football team analogy as a way of establishing a
common ground between team members (Hey et al, 2008). The research team decided to focus to the following research questions:
RQ1
RQ2
RQ3
RQ4

What could be the negative consequence of poorly aligned SC and DM processes?

What kind of benefits could be achieved through improved SC-DM integration?
What are the current practices in terms of attempts of aligning DM and SCM?
Which kind of approaches could be adopted to prevent problems of misalignment or to exploit benefits of
alignment?

In order to answer to the first two research questions, an exploratory case study was identified as the most promising approach.
This would allow us to establish current practices, seek new insights and generate ideas and hypotheses for new research (Robson,
2002). To achieve the above objectives, the study examined five companies. The criteria for selecting each exploratory case study
company were based on six measures. Each selected company had the following common factors:
(1) They Operate in Different Industry Sectors: cross-category approach provides the opportunity to observe whether the emerging
issues are common in multiple industries.
(2) They Operate in Global Markets: a global criterion suggests that they are dealing with local and global innovation drivers.
(3) They Utilise Supplier Capabilities as Part of Their Business Strategy: implies that supply chain capabilities are an active and
important part of day-to-day business activities.
(4) They Attempt to Use Design as a Differentiator: implies that design is seen as one of the key considerations in their business
development strategy.
(5) They Operate from Multiple Business Locations: alignment and cross-functional activities are already present.
(6) Their Turnover was Greater than 50m+ (Individual or Group): suggests that they have present an infrastructure and resources
to operate DM and SCM activities.

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Data was collected through semi-structured direct contact interviews (Robson, 2002) with multiple top managers in each
company, supported by the collection of secondary data from websites, company reports and other available information. The
semi-structured interviews adopted a think aloud protocol (Pervan and Maimbo, 2005) which encouraged interviewees to
articulate and discuss the problems associated with alignment and misalignment of DM and SCM and the exploration of tangible
benefits of better integration within front-end activities more fluently.
The adopted research methodologies focussed on reducing internal bias by capturing data from multiple sources in order to
better triangulate the findings (Yin, 2003). For example, in each case, a manager from the design and product development
department and another manager from the operations, purchasing or supply chain management department were interviewed. The
observer triangulation method (Stake, 1995) was used in order to improve the reliability of data collection and interpretation.
Interviews were recorded and analyzed by two different researchers (Voss et al, 2002). Consideration was also given to ethics
(Singer and Vinson, 2002). A protocol was established in relation to how sensitive results were handled and by whom, getting
informed consent, and the process of providing feedback on emerging issues.
The research team, through brainstorming activities and Root Cause Analysis, analyzed the collected data. This allowed a
generalization of results, in terms of problems and benefits, that could generally be associated with the way DM and SCM
processes interact. These results were also supported by the findings from the literature review (Abecassis, 2006; Ragatz et al,
1997). When possible, such brainstorming sessions also involved the company managers in fact, we believe that working
alongside design professionals can help supply chain professionals to expand their knowledge and vice versa.
4. Exploratory Case Studies Findings
The purpose of this section is to articulate and present the findings from the exploratory case studies. Table 1 summarises the
project framework in terms company selection criteria, areas of investigation and emerging DM and SCM alignment issues.
Table 1. Exploratory Pilot Case Studies Summary

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The exploratory pilot case study findings suggest that misalignment is a two-way street between DM and SCM functions.
Profits can be affected, if DM does not consider SC issues earlier enough in their design decision-making and brand reputations
can be damaged if SCM activities do not ensure the required quality. More positively, the findings imply that well aligned DM and
SCM activities create increased competitive advantage, enable competitor differentiation and help generate more innovative design
options. The following subsections unpack the emerging misalignment and alignment issues through the case study reviews.
4.1 Misaligned DM and SCM case studies: From the five exploratory pilot case studies, two highlighted potential problems
stemming from the poor alignment between design development and supply chain processes. Specifically the misalignment related
to the impact of material choices on net profit (FashionCo) and the cost of product quality failure on brand value (Sport-GoodsCo).
The two pilot case studies also provide two different perspectives on misalignment, as one is driven by misaligned DM issues and
the second by misaligned SCM factors.
4.1.1 FashionCo: impact of material choice and product range on net profits: FashionCo is a family owned Italian fashion brand
operating in the global menswear market. Their product development and supply chain processes are driven by seasonal
collections, divided into into two seasons; Fall/Winter and Spring/Summer. The process starts when the designers create a
collection, prototypes are then developed and final selected designs are manufactured. In parallel, the selling campaign starts with
prototypes being exhibited in fashion shows, whilst the designer managers and brand managers try to forecast which items will
become best sellers.
The output of the selling campaign is a portfolio of orders signed by customers, where the total dollar value of the order signed
is simply referred to as gross. For the bestselling items, the supply department starts to purchase raw materials (yarn, fabric,
trim) and contracting suppliers for outsourcing the production of partially or finished goods, before the end of the selling
campaign; this is called blind buying. After a formal order confirmation, from the customer, the planning department calculates
the exact quantities of materials required to buy and goods to manufacture.
After the purchase of the raw materials, production takes place in either internal or outsourced facilities and the finished
product is delivered to the customers. The total dollar value of invoices is called net. For a number of reasons, the net is
significantly lower than the gross: on average, 10-15% of the gross or potential turnover is lost due to a number of problems.
Misalignment issues emerge when collections are designed based on specific unique materials, creating an inability to source
sufficient material at the right quality and quantities to fulfil orders, resulting in reduced finished goods orders to customers. In the
fashion industry, the misalignment of DM and SCM creates a big opportunity cost for companies due to the peculiar cost structure
of the fashion industry which has very large, fixed costs and up front investments.
It is important here to stress that the part of the organization reporting to the design director is an extremely powerful force
within the fashion-oriented organization. The whole design and supply chain process is driven by design decisions, and most of
these choices are made at a supply chain level which adapt to constraints arising from design choices rather than independent
decisions aimed at optimizing the whole end-to-end process. The problems from a management standpoint are as follows:
A. Missing Raw Materials (when production of ordered products is not possible, orders are cancelled)
Purchasing minimums. If the total amount of a certain fabric needed to produce the ordered suites is not enough to reach
the minimum order quantity, the sourcing department can decide not to buy the raw material at all. Therefore
understanding these constraints are consequence of better aligned DM and SCM.
Long procurement lead times. Quite often, especially with suppliers not rated as reliable grade A suppliers, orders can
take up to six months to be delivered. Unexpected delays are also common.
Errors in bill of material. Garment fabric consumption is estimated based on actual usage in prototyping. Factors such as
unpredictable fabric behavior or extra scraps in cutting (depending on the apparels size) can result in a wrong estimation.
Poor quality. Customarily, the purchasing department purchases an extra 6% of material to face potential raw material
quality problems. Some batches of materials can result in a scrap rate that is substantially higher than expected.
B. Quality
Completing a quality check of purchased materials takes time. If quality checks are rushed or skipped altogether
defects might not be detected at quality control.
There may be internal manufacturing defects and due to delivery constraints, there is often no time to rework.
Conducting a final quality control is also very time-consuming. Some shipments could be delayed because of lengthy
waits at the QC inspection department. Delays in shipment could also lead to order cancellation.
C. Order Feasibility
Checking order feasibility is quite a complicated process; therefore it is possible for a manufacturing facility to not have
enough production capacity to process all the signed orders.

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D. Commercial Issues
Besides the above mentioned issues, all related with the supply chain management domain, there can be other commercial
issues which include:
the customer cancels the order without any explanation;
the customers shop closes;
the administration department decides to cancel an order signed by a bad payer.
The problems reinterpreted in the light of poor design/SCM cooperation include:
Designing too wide a collection without knowing the minimum purchasing quantities imposed by fabric suppliers, results
in order cancellations due to the inability to purchase and produce low selling items. It is therefore important that more
front-end alignment between DM and SCM takes places to reduce this problem;
Deciding on the choice of fabric that could sell more this season, and then looking for a supplier able to produce that
fabric, will potentially result in a short-term relationship with a large number of suppliers. Longer term relationships can
prove to be beneficial, in helping to gain control of costs and quality. Partner suppliers can also contribute to design
activity by proposing new innovative materials and processes helping innovate and create better integration between SCM
into DM activities;
Aligning better DM and SCM activities has the potential to help design collections that can better balance available
production capacity with creative design options. For example, it is in effective to launch a large number of designs
requiring a very specific production skills (e.g. vowen suede) if there is a lack of production capacity which create a
bottleneck, limiting sales.
4.1.2 SportsGoodsCo: cost of quality on brand value: The unnamed Sports-GoodsCo is the sales and marketing arm of a Chinese
holding company based in Hong Kong. Established in the early 1990s, it started life as an original equipment manufacturer
(OEM), then developed into an original design manufacturer (ODM) focussing on designing and marketing sports and fitness
equipment for major retail chains and brands in the USA and Europe. Sport-GoodsCo established its own dedicated manufacturing
facility with a research and development capability in China in order to support its growth aspirations.
In 2006, small and medium sized enterprises (SMEs) were seeing increased pressure on margins, particularly in the Pearl River
Delta. Regional Chinese Government initiatives were encouraging SMEs to look to develop their own brands. The predisposition
of many SMEs at that time was to incrementally develop their core capabilities to facilitate the development of their own branded
products servicing existing markets. A technique adopted by SMEs was piggy backing existing client intellectual property and
their routes to market (Bolton, 2009). This approach habitually led to the fracturing of relationships, resulting in the loss of core
business. For many SMEs the fear of lost business, frequently halted any attempt to move towards own branded product
development.
Sports-GoodsCo, having already invested in research and development capabilities, had used its additional skills to helped it to
gain an advantage in the ODM sport goods markets for steel fabricated products, namely fitness benches. Based on this success
and the prevailing climate, Sports-GoodsCo wanted to develop its own brand management (OBM). The main element of SportsGoodsCo business plan was the adoption of an outsourcing strategy (SCM) to build its brand business. The company had extensive
experience of sourcing products, combined with shipping and distributing products globally. The company aimed to deliver high
quality products at competitive prices due to savvy sourcing. They established first and second tier partners to provide complete
products or components that could be assembled and or finished in its own facilities.
The business strategy was developed around servicing key gym club chains in Europe and the USA with competitive priced
offers, which were differentiated by high quality branding, design and product quality. This strategy was reliant on sourcing high
quality supply chain partners who could deliver appropriate product quality at the right cost. The accessory market within the
sports and fitness industry is dominated by undifferentiated and low perceived value items unlike the equipment side of the market,
were design is used as a differentiator. This represented a potential big market opportunity for the company. In principle, the
strategy was based on the alignment of SCM and DM activities to create added value.
One of the key product lines within the sport and fitness market is the dumbbells/free weight product range. Sports-GoodsCo
used design to build a quality brand identity, communication material and well-considered product design. They engaged European
partners with extensive experience of designing and developing sports fitness products to help develop the whole Sports-GoodsCo
product range. This raised the issues of internal design quality within the company and external perception of the brand. The
flagship product range was to be the polyurethane (PU) dumbbell range. The use of high impact materials would provide
performance advantages resulting in increased product durability. A unique numbering system was developed for the dumbbells
that made lettering easy to read from distance, provided a distinctive visual appearance and even incorporated embossed braille to
address changing legislation in Europe. Design effort was spent on developing tri-colour molded end caps and detailing surface
finishes to create a high quality product.

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Sports-GoodsCo and its global sales teams were successful in winning business with the prototype and sample products. This
required the company to go to the next stage - full production, requiring the ramp up of both the supplier and internal capabilities.
Investment in molds needed to be made, suppliers agreed and trial samples sent to key accounts.
In order to discuss the case of the cost of quality on brand equity it is necessary to explain the nature of the problem that
occurred. What emerged was a breakdown in quality assurance procedures, on-site product inspection and testing. The problem
was not evident until it was in use under trial. The problem stemmed from the molds not being heated to a sufficient temperature
prior to molding. This was to ensure that air bubbles generated in the manufacturing process would be minimized; this failure
resulted in products being produced that had hidden faults (air bubbles around the edge of the product). When persistently dropped
(as is common in gyms) PU material broke away from the edge of the product (where the build up of air bubbles had taken place)
leaving the product damaged and faulty.
The problems from a management standpoint are as follows:
A. Product Range Size (stretching internal capabilities)
Maintaining the depth and breadth of expertise of the team (DM and SCM) as the product range expanded, impacted on
maintaining the alignment between SCM and DM activities. As the product range and complexity of design increased (more
manufacturing processes), it was not matched in terms of enhanced SCM capabilities, which ultimately resulted in product
failure. Upholding and sustaining consistent day-to-day activities could have been achieved by better communication between
SCM and DM on emerging negative design issues.
B. Minimum Order Quantities (pressure to maintain unit price on small orders)
Failure to avoid eroding key supplier relationships, due to constantly changing minimum order numbers (trust), impacted on the
final product quality. More accurate planning was needed and more realistic alignment of design options required (volume
numbers). This would have prevented sales team frustration and over promising to clients.
C. Quality Control Procedures (weak quality assurance procedures and onsite testing)
The inability to ensure adherence to procedural control in off-site situations resulted in failure.
D. Retaining High Quality Staff (high market demand for experienced and quality staff)
An identified external factor was the drain on resources and moral when continually investing in non-committed staff, who left
the company and SCM activities exposed. Retaining knowledge and expertise within the business to drive DM and SCM
activities is crucial to success.
E. Commercial Issues
The misalignment of SCM and DM had a negative impact on brand equity due cost of quality issues. It created mistrust within
the sales team and ultimately resulted in customers cancelling orders
The problems reinterpreted in the light of poor SCM and DM cooperation include:
-

Selecting manufacturing processes that required too high minimum order numbers for initial launch, impacting on design
strategy;
Lack of alignment between SCM and DM procedures in pre-production and launch phases;
Lack of stringent test procedures on-site in with suppliers to ensure product quality prior to shipping.

4.2 Benefits of aligning and integrating DM and SCM case studies: The remaining three exploratory case study companies
demonstrate the potential benefits of how aligning DM and SCM can improve idea generation, achieve more effective innovation,
and enable risk avoidance. Each case study identifies specific benefits of improved alignment and integration between DM and
SCM:

ShoeCo and their increased competitive advantage

MaterialsCo and their enhanced competitor differentiation
PackagingCo and their new innovative packaging design

4.2.1 ShoeCo and their increased competitive advantage: ShoeCo is a global shoe producer, selling its shoes directly to end
customers (even though they also use a wholesale distribution channel). ShoeCo has to compete in a traditionally design intensive
industry, and therefore naturally identified design as the key differentiating factor of its products. Notwithstanding its large and
continuously evolving product range, ShoeCo has not manufactured anything since 2005 and relies on a network of external
manufacturers. The R&D function has quite an internal focus, and does not deal with the external supply network outside single
projects activities. On the other hand, the company has a specific organizational unit, detached from the design and innovation BU,
that copes with the last development phases together with the NPD process that deals with external manufacturers. The product
development business unit is typically involved in later phases and is not involved in external activities.

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59

The main benefit for ShoeCo from enhanced alignment was their increased competitive advantage through their focus on
design and interaction with external manufacturers in their supply chain. This can be achieved in a number of ways but in their
case, clearly establishing which business unit deals with which external manufacturer is a practice which has the benefit of solid
lines of communication and defined responsibility. As it could be easily understood, the role of the design function in their Supply
Chain activities is crucial. All in all, design has to play more strategic role than R&D in ShoeCo due to their fiercely competitive
industry.
4.2.2 MaterialsCo and their enhanced competitor differentiation: MaterialsCo is a global decorative surface material supplier,
selling laminates to building and construction companies, furniture manufacturers, architects and end customers. The largest part
of the production process is carried out internally. Unlike ShoeCo, MaterialsCo is operating in a commodity market. Yet, as hard
and technical features of the products are relevant, they are not key to winning orders within its sector. MaterialsCo also identified
design as being their key differentiating factor. MaterialsCo aim to innovate in a proactive way, where they receive input from
customers before proposing innovative materials.
The company relies on both the design and the purchasing teams to cope with opportunities that emerge from their existing
supplier base. The role of the designer becomes even more crucial in looking for innovation opportunities in new suppliers within
their industry, mainly through participation in trade shows and exhibitions. Within the product development department, there is a
fair balance between the design and the R&D.
The main alignment benefit from the MaterialsCo case study was that they managed to differentiate themselves against their
competitors. They achieved this through introducing new kinds of surface paper allowing for the design of a variety of different
finishes for the customer. This also had the benefit of creating different tactile sensations for the customer through these finishes,
going beyond the colour and pattern only approaches of their competitors. The company was able to gain this differentiation by
being able to identify a potential design opportunity and capitalise on it through enhanced communication and engagement with its
technological supply chain.
4.2.3 PackagingCo and their new innovative packaging design: PackagingCo is a global metal packaging supplier, which
develops, produces (mostly in owned facilities) and sells metal packaging to key drink and food brands. As in the previous cases,
the company is trying to use design to differentiate their products in a commodity market, even though specific innovation
activities typically start from the brief of a customer. Similarly to MaterialsCo, also in PackagingCo the design and the purchasing
teams are relentlessly analysing the evolution of supplier skills and capabilities in order to identify innovation opportunities.
In this case, the main benefit of DM and SCM alignment was the realisation of a new innovative packaging design.
PackagingCo was able to introduce this innovation through exploiting fresh opportunities in new materials and production
equipment within their supply chain. Both MaterialsCo and PackagingCo rely on both the design and the purchasing teams to cope
with opportunities that emerge from their existing supplier base. The role of the designer becomes even more crucial in looking for
innovation opportunities in new suppliers within their industry, mainly through participation in trade shows and exhibitions.
4.3 Critical analysis: The results from the analysis of the five case studies demonstrate:
- on one hand, the risk associated with managing of design and supply chain activities in an independent (sometimes
sequential) way,
- and from the other hand the potential benefits of how aligning design and supply chain management can improve idea
generation, achieve more effective innovation, and enable risk avoidance.
Each of the three success story case studies identified specific benefits of improved alignment and integration between DM
and SCM: competitive advantage, differentiation, and innovative design. All of the companies in the study advocate the growing
importance of soft, aesthetic and emotional features of products as real winning factors in their own markets, despite the fact that
they are all in different industries. By generalizing the result of the two cases of poor integration, we came up with the following
list of potential improvement areas:

Variety management: designing an overly large range of products would create excess costs in the supply chain
Match between design requirements and available capabilities
Assessing market demand before setting up large scale production facilities
Balancing production capacity (among suppliers/over time)
Putting the right emphasis (and managerial focus) on the introduction of new processes and procedures

The last three case studies have shown that real, long lasting competitive advantages can be built and sustained through the
synergy between design, technology and the supply chain. Each company has established a different balance between design and
R&D within their product development departments. In particular, design plays a predominant role in ShoeCo; in MaterialsCo, the
R&D unit is also very important; whilst PackagingCo is a very technology focused company with only a small internal design
studio. A good part of the effort put into the technology side of the product development process is aimed at enhancing different

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60

design opportunities that can be translated into soft and emotional features and characteristics of the products. For instance,
MaterialsCo manages to make a step forward against its competitors through the introduction of new kinds of surface paper that
allows the design of different finishes in terms of tactile sensation for the customer. Similar examples can be found in
PackagingCos recent innovations, when new materials and new production equipment have allowed the realisation of innovative
packaging designs. These cases show that analysing suppliers capabilities and new technological opportunities arising along the
supply chain could facilitate the discovery of design opportunities and design is now acting as an enabler.
The literature review has identified gaps in terms of tools and processes that have not yet been widely adopted in an integrated
way; for example, SCM tools in the front-end process of design related activities and vice-versa with design-intensive activities in
the SCM domain. Bringing SCM into front-end processes could result in two kinds of benefits: on one hand, being aware of SC
processes (and constraints) during the early concept development stages will help in the avoidance of risks such as unfeasibility as
well as costly and time-consuming design revisions. On the other hand, the current emphasis is on the realization and launch of
products while the adoption of SCM tools and techniques could help support the generation of new ideas. This will require the
alignment and integration of PDD and SCM processes. In summary, the five case studies show that DM and SCM are interlinked
and dependent on each other to deliver value to the end customer.
5. Conclusion and Further Development
This paper discussed the preliminary results of a cross-disciplinary research project, putting together teams of experts from the
domains of design management and supply chain management. The aim of the research is to investigate how better integration
between design and the supply chain could be mutually beneficial. The paper is therefore meant to be a scoping paper that clearly
defines a research territory through gaps in the literature along with pilot case study support.
The domains of DM and SCM have been identified as being important to delivering product success and contributing to
product innovation (Pero et al, 2010; Abecassis, 2006; Ragatz et al, 1997) however, it is less clear on how alignment can be
achieved. The role of DM has been identified as a potential key enabler for achieving good results, as far as managing buyersupplier relations are concerned (Twigg, 1998; Khan and Creazza, 2009). This paper starts to fill this gap in the scientific literature
in this field by providing further insight into misalignment issues and tangible alignment benefits.
Our initial exploratory case study findings suggest that earlier and deeper alignment of DM and SCM activities in the front-end
have the potential to improve how companies:

Listen for innovation opportunities (awareness of SC capabilities/design needs)

Look for innovation opportunities (ability to identify new and unused SC capabilities to generate new design possibilities)
Communicate innovation requirements/operations constraints and limitations (starting discussions earlier and being able
to use each others language (DM and SCM) to communicate issues and opportunities more effectively)
Encourage new innovation efforts (connecting multiple SC capabilities together in new ways-from cost reduction to new
design possibilities)

Figure 3: Four Sets of Activities

As shown in Figure 3, these practices can be directed towards both internal and external activities. This initial framework can
be used to identify priorities and to draw up a roadmap towards the maximization of the supply chain contribution to product
innovation, starting from DM and SCM practices, aimed at listening for innovation opportunities that come from actual suppliers.
This study is still exploratory and the size of the sample is a limiting factor. Our aim is to enlarge the sample so that it includes
different companies from similar industries within the UK and Italy so that a more comprehensive comparison between different

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61

country practices can be made. One of the more valuable contributions of this research is the identification of some urgent issues in
practice that further research could effectively address. Future research directions should include the identification of new ways to
provide incentives for DM and SCM alignment. Effective mechanisms to leverage creative supplier capabilities with approaches
that can provide increased production capacity would be one of the expected outcomes.
An important first undertaking of this research project involved bringing together two different fields of research and domains
of expertise, design management and supply chain management. We can now state that developing a common language is already
an achievement in itself. Moreover, a literature review has identified gaps in terms of tools and processes that have not been
widely adopted in an integrated way (e.g. SCM tools in front-end design related activities and, vice versa with DM activities in the
SCM domain).
Bringing DM and SCM into front-end idea management processes could bring two kinds of benefits: firstly being aware of SC
processes (and constraints) during the early concept development stages will help in avoiding risks of unfeasibility as well as
costly and time-consuming design revisions and secondly, the adoption of SCM tools and techniques in DM practices could help
support the generation of new ideas. This will require the alignment and integration of PDD and SCM processes.
Future research directions are clearly defined below. This research team will keep exploring how to achieve greater cocreation between DM and SC functions. In particular, the research will focus on the following issues:
1.
2.

Variety Optimization: Designing the right level of variety in order to both maintaining design meaning while
maximising product value and reducing production costs;
Assessing Existing Supplier Capabilities: in order to design products which are both simple and economical to
manufacture.

Future research should also provide support for the development of specific tools and routines to enhance communication
between SMEs and big corporations; most of all when a wide spectrum of innovation features has to be included in the innovation
dialogue. This should contribute to moving buyer-supplier dialogue from a pure delivery attitude into once which creates new
innovation.
Nomenclature
BU
DM
ESI
IJEST
NPD
OBM
ODM
OEM
PDD
PU
R&D
SCM
SME

Business Unit
Design Management
Early Supplier Integration
International Journal of Engineering, Sciences and Technology
New Product Development
Own Brand Management
Original Design Manufacturer
Original Equipment Manufacturer
Product Design Development
Polyurethane
Research and Development
Supply Chain Management
Small and Medium Sized Enterprise

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Biographical notes
Prof. A. Brun holds a PhD in Industrial Engineering and is an Assistant Professor at Politecnico di Milano, where he teaches Quality Management. His research
interests are in the domains of Supply Chain Management and Quality Management, with particular focus on specific industries such as Luxury Goods,
Automotive, and the Service sector. He is also Director and Coordinator of executive trainings in Six Sigma and Luxury Management at MIP the business school
of Politecnico di Milano.
Prof. S. Bolton is the Director of the Centre for Competitive Creative Design (C4D), Cranfield University, United Kingdom. Professor Bolton specializes in
helping companies improve and develop their design capabilities and business performance. He has extensive experience of working in Europe, North America,
South America and Asia for local and global brands. He has advised and consulted leading global brands such as Rubbermaid, Hyundai Cars, Kia Motors,
Panasonic, LG Electronics, GP Industries. His insight and foresight lifestyle research is supported by Procter and Gamble and act as a thought leader in oral care,

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laundry and prestige product production. His work has been exhibited in the Design Museum in London, the Axis Gallery in Tokyo and the Pompidou Centre in
Paris among others. His work has been published in major design journals internationally in Europe, Asia and North America. Simon Bolton has worked nationally
and internationally promoting the role and use of design with organizations such as the Design Council, Industrial Design Society of America, Korean International
Design Promotion and the Hong Kong Design Centre.
C. Chinneck is a PhD candidate in the Centre for Competitive Creative Design (C4D), Cranfield University, United Kingdom, where she also received her Master
of Design in Innovation and Creativity in Industry in 2010. She was awarded an iCASE award and her doctoral research is sponsored by the EPSRC and the
multinational, consumer goods organization, Procter and Gamble. Her current areas of research include Idea Management, Idea Generation, Design-Driven
Innovation, and Open Innovation.

Received October 2012

Accepted October 2012
Final acceptance in revised form November 2012