Challenges


Risks

Because this model is mostly suitable for the more innovatiove product developement, this model is not without risks. It is crucial that there are good agreements about the responibility for the innovation risks. These risks are even bigger because investments in this module are relatively high, in the product development and in the relation between the partners. 

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It is in this module a lot more riskfull and expensive to change suppliers if it doesn’t go to plan. Because of these risks, partner selection and a Total Cost of Ownership analasys is extremely important.

Intellectual property

With Build to Requirements the ownership of the technical product documentation (like drawings and software) and the bought design documentation will belong to the OEM. Exceptions for example are in place for standardized modules (mechanical, electrical and software) that come out of the portfolio of the supplier and for the ‘source code’.

About possible patent worthy ideas the partners have to form well documented agreements. The OEM will mostly want to protect the use of these patents to prevent competitors using them. The use of other OEM partners of the supplier can be regulated by licencing the patent.

The right tools

Stating the obvious: the succesfull implementation of the model starts with forming the right requirements. They form the base of the agreements between the partners.

The partnerselection tool and the Total Cost of Ownership tool can be applied by selecting and developing a Build to Requirements partnership. Besides that is it imporant, when using this modul, to use alliance management tools. Meaning the structural implementation of the partnership. These tools will be further explained in module 9 ‘Lets get started’.