Analytical Essay on New Product Development and Integration

This quantitative research work aim to investigate the influence of supply network strategies on innovation and supply chain competence in pharmaceutical industries, by explicitly focusing on the moderating effect of knowledge sharing relationship between supply network strategies and innovation. summarized research finding will be explained, discussion will help to answer the research questions mentioned in chapter one as the following: (R1) To what extent do supply network strategies influence a pharmaceutical manufacturer’s innovation?. (R2) To what extent do supply network strategies influence a pharmaceutical manufacturer’s supply chain competence?. (R3) To what extent does knowledge sharing influence a pharmaceutical manufacturer’s innovation?. (R4) To what extent does innovation influence a pharmaceutical manufacturer’s supply chain competence?. Moreover, discussion of the hypothesis of this research, the key study finding related to previous literatures will be examined.

2 Interpretation of the Findings

The study data were analyzed with a series of statistical analyses to establish the dependability, validity, and strength of the scales using IBM SPSS Statistics and SPSS AMOS (version 23.0). Cronbach’s alpha test was used to establish the internal consistency of the scales. The scores ranged from about 0.882 up to the rate of 0.930 suggesting that the scales are reliable. Thereafter, the convergence factor was derived through exploratory analysis

First, The supply network strategies: Strategic alignment and integration for new product development, knowledge sharing (Firms Absorptive capacity, firm’s desorptive capacity), innovation, and supply chain competence with eigenvalues ranging from a certain point together explained 70% of the variance. A variance factor technique Harman’s single test was applied to investigate for possible common method bias in the data. Exploratory factor analysis on a single fixed factor revealed that the factor explained about 40% variance from the variable investigated compared to almost 70% of variance explained by the six-factor model, suggesting that common method bias is not a problem in the data.

Second, confirmatory factor analysis was conducted to establish the convergent and discriminant validity of the measurement scales. All the scales yielded acceptable values for average variance extracted and composite reliability. thus, establishing convergent reliability. To establish discriminant validity, the approach suggested by Fornell and Larcker (1981) was adopted. Being apparent that construct that encase correlation which seem to be extremely lower than the square root of a relatively variance, the value explored are relatively extreme when compared to the shared variance in the values. Thus, the data look to be discriminant validity.

A selection of fit indices indicate that the data has a reasonably good fit with the measurement model: χ2 = 1001.307; χ2/df = 1.987; TLI = 0.935; CFI = 0.942; RMSEA = 0.052. After achieving acceptable results for the measurement model, model identification was confirmed and then the full structural model and hypotheses (no interaction) were tested. The structural model results indicate that the data has a good fit with the proposed model: χ2 = 700.194; χ2/df = 2.251; TLI = 0.932; CFI = 0.940; RMSEA = 0.058. Table 5.21 presents the results of the proposed hypotheses. All of five of the direct study’s hypotheses are supported.

Third, hypothesis tests were conducted to assess whether allotment and knowledge sharing. that is, (firm Desorptive capacity and as well Absorptive capacity check the rapport that occur between the innovation and development of product and as well alignment which are seen to be supply network approach. The results are summarized where it was revealed that the firm absorptive capacity (H3) fails to correspond with both alignment and innovation form of supply strategy. The same thing applicable at (H4) the innovation and development also fails to correlate. However, in H5 the firm’s Desorptive tends to serve well-performing a moderator role between innovation and alignment form of supply strategy but was otherwise in the way round as it is in H6, all in table 5.22.

Fourth, tests were conducted to assess whether the so call innovation as a supply network approach acts as a mediator in the relationships between innovation, integration, and development of invented products as well as supply chain. It was shown that innovation as an approach has a slight effect between supply chain and alignment, and partially affect supply chain competence and the integration and development of new product.

Last, multiple mediation tests were conducted to know if the firms mediated in supply network approach, the result show that this firms strongly mediated between development and integration of invented product and innovation and the other supply strategy in table 5.25

3 Research Key Findings

The findings of this research work play a role in supply network approach, supply chain competence and innovation, knowledge sharing and the one that ensues

1. Six out of the nine proposed hypotheses were supported. Thus, each of the supply approach that is the development and integration of invented product as well as alignment has consequential contribution with innovation as well as supply chain. Also, this so call innovation has a positive relationship with supply chain competence. Results support that firm’s Desorptive Capacity is moderating the relationship between strategic alignment and innovation
2. Out of the hypothesis envisaged, only three seem not to be proven Thus, Firms Absorptive capacity is not moderating the relationship between supply network strategies (Strategic alignment and integration for new product development) and innovation. Firm’s Desorptive Capacity is not regulating the rapport between integration for new product development and innovation.
3. The rapport between strategic alignment and innovation fully mediated by Firm’s Absorptive capacity and Firm’s Desorptive Capacity.
4. The relation between Integration for new product development and innovation fully mediated by Firm’s Absorptive capacity and Firm’s Desorptive Capacity
5. Multiple mediation test results indicate that Firm’s absorptive capacity and Firm’s Desorptive Capacity both are positively mediating the rapport between supply network strategies and innovation.
6. Improving supply chain competence in Pharmaceutical manufacturing industries needs to set up the right strategies with the partners in the supply network.
7. Achieving supply chain competence needs to go beyond the supply chain management concept. It needs to manage supply network as a whole.
8. This research has indicated the implementation of integration for new product development strategy on pharmaceutical manufacturing industries, leads to innovation and supply chain competence.
9. The network theory succeeds to explains the connection between the supply network strategies and supply chain competence.
10. Implementation of strategic alignment strategy is a vital to improve firm’s innovation as well the supply chain competence.

4 Discussion

After reviewing literature related to supply network strategies, knowledge sharing, innovation, and supply chain competence. The findings obtained from the literature review assist the researcher to find out the research gap and set the research questions mentioned in Chapter one. Therefore, it is concluded that the existing literature emphasizes the need for researchers to investigate the supply network strategies and knowledge sharing that could influence innovation and supply chain competence. However, no studies have been conducted to investigate the impact of supply network strategies: strategic alignment and integration of new product development on innovation and supply chain competence with the moderation effect of knowledge sharing: firm’s absorptive capacity and desorptive capacity.

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The objectives of this research are to create a conceptual model that links strategic alignment and integration for new product development (together referred to a supply network strategies) with innovation and supply chain competence in pharmaceutical manufacturing firms. As well, to assess the moderating effect of firm’s absorptive capacity and firm’s desorptive capacity in the relationship between supply network strategies and innovation, as these two forms of knowledge sharing have been rarely examined together in the pharmaceutical industry. Furthermore, To propose guidelines/recommendations that will have value to pharmaceutical manufacturing firms in improving their supply chain competence.

The precepts of network theory, knowledge-based view theory, and dynamic capabilities theory were used to argue for the links between supply network strategies and innovation and supply chain competence with the moderating effect of knowledge sharing. This relate to a report by Tan and Tracey (2007), submitted that, the agreement between supplier and customers in effective project planning aids firm performance, this result thus support the following:

First, the results indicate that strategic alignment effectively creates an impact on innovation. When firm’s strategically aligned their process and strategies, that results to innovations as both firms get the benefits from the shared resources and the capabilities, eliminate waste and reduce risk. Strategic alignment with Pharmaceutical manufacturing firms enhance the market success as well as the production design, research and development by means of enabling coordination and collaboration. The results of this study suggest that firms may promote innovation through strategically aligned with their partners. This is consistent with the previous innovation literatures linked the strategic alignment to the potential critical success factors of innovation. (Acur et al., 2012, Burn & Szeto, 2000; Kearns & Lederer, 2003). The following is a summary of discussion of the research hypotheses:

• H1: Strategic Alignment is positively related to Innovation.

Second, development and integration for new product necessitate innovation, by integration of the parties within the supply network to create a new innovative product. When different pharmaceutical manufacturing industries works to achieve creation of unique product. Moreover, increase the access of using new technology, components, materials, and ideas. To create new drug and introduce it to the market it takes near 10 to 15 years and approximately cost around $5 billions. The result is consistent with the previous studies which highlight on importance of collaboration between partners for innovation (Francesco et al., 2015; Kumar et al., 2017; Zhou et al., 2017) that support the hypothesis below:

• H2: Integration of new product development is positively related to innovation.

Hypothesis One and Two provide answers to the first research question: does supply network approach affect pharmaceutical innovation?

Third, with regards to Hypothesis 3: firm’s absorptive capacity regulates the rapport that exist between innovation and alignment strategic. by testing the moderating effect of the Firm’s Absorptive Capacity on the relationship between Strategic Alignment and innovation, researcher did not find statistically significant evidence that under conditions of greater moderating influence levels of firm absorptive capacity on the relationship between strategic alignment and innovation on the other word the Firm’s Absorptive Capacity when it is hypothesized to acts as a moderator it shows that it doesn’t have any impact on the strength of the relationship. Despite not finding statistically significant support for H3.

Fourth, with regards to Hypothesis 4: firms absorptive capacity regulates the rapport as regards integration and new product development on the other (innovation the findings doesn’t provide support for the positive moderation effect of the absorptive capacity on the supply network in relationship between integration of new product development and innovation. This result build on existing evidence of Ruizl Moreno, Roldan Bravo & Lloren (2016), they submitted that an extreme absorptive will necessitate or encourage what so call unscrupulous act in respect to supply network, peradventure it fails to correlate desorptive capacity. The result of work communicates that absorptive capacity does not influence the INPD and as well innovation. Alternatively, once the firm is cohesive with other firm, solely for the expansion and growth of product, this postulation is considered to impact innovation absolutely, as being reflected in H1, without the firm being dependent another firm

Fifth, finding shows that, aligned to previous literature that linked a knowledge source’s desorptive capacity to supply chain management Roldan et.al the desorptive capacity of each actor involved in knowledge sharing as the moderator roles between strategic alignment and innovation does exist. That supporting what the study hypothesized in Hypothesis 5: the desorptive capacity regulate the rapport that exists in respect of strategy alignment and innovation. In fact, the results show that the moderating role of firm’s desorptive capacity is the optimum solution for innovation within the supply chain terms.

Sixth, The findings of this study also revealed with regards to H6: A Firm’s Desorptive Capacity moderates the relationship between Integration for New Product Development and Innovation. Addressing desorptive capacity from supply network perspective, it demonstrated that there is no moderating effect of desorptive capacity in the relationship between integration for new product development and innovation. This result doesn’t support assumptions in the desorptive capacity literature that knowledge sharing can produce economic and non-economic benefits for the sender firm (Tranekjer and Knudsen, 2012). While previous research by Simonin (1997), Madhok and Tallman (1998), and Hardy et al. (2003), and the study by Ryo and Kim (2015), has focused on that sharing knowledge in a network setting can improve operational performance for organizations by fitting or adapting their inter-firm processes. these results demonstrate that desorptive capacity as a dynamic capability has no value on moderating the relationship between INPD and innovation.

A Post hoc analysis carried out to check mediation impact of Firm’s absorptive capacity and Firm’s Desorptive Capacity on the relationship between Integration for New Product Development and Innovation. According to Lichtenthaler and Lichtenthaler (2009) proposed theoretical framework that presented absorptive and desorptive capacity as two particles that go together. Accordingly multiple mediators test is consider in this study.

This study has contributed to a new model which expands knowledge sharing contexts, Firm’s absorptive capacity, and firm’s desorptive are multiple-mediators variables intervention in the relationship between supply network strategies and innovation. the results of simultaneously test indicates that Strategic alignment was positively related to innovation, which supports earlier findings in H1. However, relationship of strategic alignment on innovation vanished after introducing Firm’s absorptive capacity, and firm’s desorptive as a mediating variables which fully mediates the relationship between strategic alignment and innovation, which implies that strategic alignment has an indirect effect on innovation only through Firm’s absorptive capacity. Similarly, Integration for new product development was positively related to innovation, which supports earlier findings in H2. The impact of Integration for new product development on innovation disappeared after introducing Firm’s absorptive capacity, and firms desorptive capacity as a mediating variables which were fully mediates the relationship between INPD and innovation