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Black Box Design-Product Development
Previous definition:

A component cost reduction strategy used effectively in the Japanese auto industry is called black box supplier design. Under this approach, the team provides a supplier with only black box description of the component- a description of what the component has to do, not how to achieve it( Clark and Fıjimoto, 1991). This kind of specification leaves the vendor with the widest possible latitude to design or select the component for minimum cost. And additional advantage of this approach is that it relieves the internal team of the responsibility to engineer and design the component. Successful black box development efforts require careful system-level design and extremely clear definitions of functions, interfaces, and interactions of each component.

(Kalpakjian S., Schmid S.R.,Manufacturing Engineering and Technology, 5th Edition, pg.223)

New definition-better:

The degree of supplier participation vary. At white box design, the supplier is given blueprints and told to produce to the specifications. In a hybrid arrangement, called gray box design, the supplier works with the customer to jointly design the product. At the highest level of supplier participation, known as black box design, suppliers are provided with general requirements and are asked to fill in the technical specifications.

Black box design is best when the supplier is acknowledged “expert”. Design is primarily supplier-driven, based on the buyer’s performance specifications. The supplier is informed of customer requirements and then is given almost complete responsibility for the purchased item, with only review and concurrence on the purchased item’s specifications by the buying company.

Analysis of the “gray box” versus the “black box” integration efforts shows that supplier involvement in technical project assessment is more important in black box efforts than in gray box efforts, while supplier involvement in business project assessment is more important for gray box than for black box efforts. This suggests that suppliers who are assuming greater responsibility in the design effort need to have input into the technical assessment in order to assure effective decision making, and probably need to share more information with the buying company. Suppliers involved at a black box level are assuming broad responsibility for making sure the component/system they design will function properly in the overall product. Suppliers who are taking on less responsibility in the design effort don’t need the same level of interaction with the buying firm regarding technical issues.

(“Introduction to operations and supply chain management”- Cecil C. Bozarth, Robert B. Handfield-pg.158)