Procurement Glossary
Co-development: Joint product development with suppliers in Procurement
November 19, 2025
Co-development refers to the joint development of products, services or solutions between companies and their suppliers. This strategic collaboration makes it possible to realize innovations more quickly and make the most of market opportunities. In Procurement , co-development plays a central role in tapping into supplier expertise and reducing development risks. Find out below what co-development is all about, which methods are used and how you can successfully implement this strategy.
Key Facts
- Co-development reduces development times by an average of 20-30% through parallel workflows
- Joint investments in R&D reduce individual cost risks for both partners
- Early supplier integration improves product quality and manufacturing efficiency
- Intellectual property agreements regulate rights to jointly developed innovations
- Successful co-development projects lead to long-term strategic partnerships
Contents
Definition: Co-development
Co-development describes the systematic cooperation between purchasing organizations and suppliers in the joint development of new products, technologies or services.
Core elements of co-development
The key components include shared resources, common objectives and coordinated development processes. Both partners contribute specific expertise and share investments and risks.
- Joint financing of development projects
- Exchange of technical know-how and expertise
- Coordinated project management and milestone planning
- Shared responsibility for development results
Co-development vs. traditional supplier relationship
In contrast to the traditional client-supplier relationship, in co-development the partners work together as equals. While traditional procurement relies on ready-made solutions, co-development creates tailor-made innovations through co-creation with suppliers.
Importance of co-development in Procurement
Modern procurement strategies use co-development to tap into external innovation potential and strengthen the competitive position. This approach provides access to specialized technologies and significantly reduces time-to-market.
Methods and procedures
Successful co-development projects require structured procedures and proven methods for coordinating cooperation between the partners.
Project initiation and partner selection
The systematic identification of suitable development partners forms the foundation of successful co-development initiatives. Technical skills, cultural fit and strategic orientation are evaluated.
- Technology roadmap alignment between the partners
- Assessment of innovation capacities and R&D resources
- Analysis of strategic complementarity
Governance structures and project management
Clear management structures ensure efficient decision-making processes and transparent communication. Joint business plans define common goals and key performance indicators for the collaboration.
Intellectual Property Management
The regulation of property rights to jointly developed innovations requires precise agreements. IP co-creation models define rights of use and exploitation options for both partners.
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Key figures for co-development
Effective KPI systems enable the systematic evaluation and management of co-development activities and their contribution to the company's success.
Innovation performance and time-to-market
Development speed and innovation quality are measured using specific performance indicators. These KPIs evaluate both the efficiency and effectiveness of the joint development work.
- Reduction of development time compared to internal projects
- Number of successful market launches per year
- Patent and IP generation from co-development projects
Financial performance indicators
ROI calculations and cost savings through co-development are systematically recorded and evaluated. Both direct development costs and indirect effects are included in the assessment.
Partnership quality and sustainability
Long-term performance measurement includes the evaluation of partnership quality and continuity of cooperation. Supplier innovation metrics record the partners' contribution to overall innovation performance.
Risk factors and controls for co-development
Co-development projects entail specific risks that can be minimized through suitable control mechanisms and preventive measures.
Technical and commercial risks
Development risks arise due to technical uncertainties and market changes during the project term. Unclear specifications or changing customer requirements can lead to cost increases.
- Regular milestone reviews and adjustments
- Flexible project structures for scope changes
- Continuous market observation and trend analysis
Partnership and coordination risks
Different corporate cultures and working methods can lead to communication problems and delays. Strategic partnerships require intensive coordination and joint governance structures.
Intellectual property and competitive risks
Unclear IP regulations can lead to legal conflicts and hinder the exploitation of development results. There is also a risk of unwanted know-how transfer to potential competitors.
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Practical example
A car manufacturer is developing an innovative battery management system for electric vehicles together with an electronics supplier. The OEM provides vehicle integration know-how and test capacities, while the supplier contributes its expertise in power electronics. The joint development reduces the time-to-market by 18 months compared to sequential development.
- Joint investment of 15 million euros in development and prototyping
- Weekly cross-functional development teams at both locations
- Shared IP rights with exclusive usage rights for defined market segments
Current developments and effects
Co-development is constantly evolving and is shaped by technological advances and changing market requirements.
Digitalization and AI integration
Artificial intelligence is revolutionizing co-development processes through automated idea evaluation and predictive analyses. AI-supported platforms enable more efficient partner identification and significantly accelerate development cycles.
- Automated matching algorithms for finding partners
- AI-based risk analysis for development projects
- Predictive analytics for market potential assessment
Sustainability-oriented development
Environmental aspects and the circular economy are becoming increasingly important in co-development projects. Partners develop sustainable solutions together and integrate ESG criteria into innovation processes.
Ecosystem-based innovation
Co-development is expanding from bilateral partnerships to complex innovation ecosystems. Open innovation approaches enable the involvement of multiple stakeholders in development projects.
Conclusion
Co-development is establishing itself as a strategic instrument for accelerating innovation processes and tapping into external expertise. Joint development with suppliers enables risk sharing, shorter time-to-market and access to specialized technologies. However, successful implementation requires clear governance structures, precise IP regulations and systematic risk management. Companies that use co-development strategically can sustainably strengthen their innovative power and realize competitive advantages.
FAQ
What distinguishes co-development from conventional contract development?
In co-development, both partners share risks, investments and development responsibility equally. In contrast to contract development, joint IP rights and long-term strategic partnerships with shared chances of success are created.
How are intellectual property rights regulated in co-development?
IP agreements define precisely which rights arise to jointly developed innovations. Typical models include shared property rights, exclusive usage licenses for defined markets or technology areas and regulations for further developments.
Which success factors are decisive for co-development?
Successful co-development projects require complementary skills from the partners, clear governance structures and transparent communication. Joint strategic goals, balanced resource contributions and professional project management are also critical to success.
How can co-development risks be minimized?
Risks are minimized through careful partner selection, clear contract design and regular milestone reviews. In addition, pilot projects with suppliers help to gradually build up cooperation and gain experience.
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