Do customers improve new product development efficiency? Revealing the impact of manufacturing-based absorptive capacity

In order to collaborate with customers in new product development efficiently, companies need to maintain some inherent competence that allows them to both understand the external party's processes and absorb external knowledge. The aim of this study was to operationalise absorptive capacity for manufacturing and examine its impact on new product development efficiency. A large scale survey was sent out to Swedish manufacturing companies and the data was analysed using hierarchical regression. The results show that it is not manufacturing competence per se that increases new product development (NPD) efficiency, but rather how the competence is leveraged through various integration mechanisms. The results indicate that the indirect ability to improve NPD efficiency should also be taken into account when a firm is deciding whether to invest in manufacturing or not.