Competition today is driving firms to introduce products with a higher degree of product innovation. Consequently, there is a growing need to understand the critical successful factors behind higher product innovation performance. In order to enhance a manufacturer’s product innovativeness and performance, many firms try to rely more on their suppliers support in new product development (NPD), so that they could concentrate more on their own core competencies and leverage their resources properly. Prior research on product innovation highlights, it is important for product development capability and accessing external knowledge from other firms. However, survey evidence indicates that suppliers are perhaps the most important source of external knowledge. Literatures have covered different means to achieve better supplier collaboration through supplier involvement, embeddedness, integration, and etc. Nevertheless, the antecedent of supplier integration in new product development (NPD) in terms of knowledge management (KM) and new product development capability (NPDC) has not yet been investigated. Based on the existing theory to identify the antecedents under which competence in selection of supplier contributes to product innovation with greatest benefits, this project conducts an empirical study on the relationships of supplier knowledge management (KM) capability and selection of supplier based on their New Product Development Capabilities (NPDC) as an antecedent for embeddedness with supplier in NPD. Through the empirical survey with more than 210 enterprisers in the Pearl River Delta (PRD) of Southern China; in order to enhance the firm competitive advantage, firms have to develop their distinguish competence through proper supplier integration with suppliers who are strong in KM and NPDC, in which study on the interrelationships and alignment have not been examined before. Besides, the traditional way of selecting suppliers by cost, quality and delivery (CQD), is inadequate in today’s global market. On top of the conventional approach, i.e. technological, R&D, manufacturing and financial capabilities; the supplier knowledge management and product development capability (i.e. both KM & NPDC) are crucial to the success of NPD. However, research on studying the knowledge and product development capabilities as antecedents to embed supplier in NPD is still lack of empirical evidence. This study using survey data from a longitudinal sample of PRD firms, the findings of structural equation modelling (SEM) analysis show that firms can enhance their distinguish competence in NPD through proper integration with their suppliers of utmost importance in achieving a higher product innovation who are strong in KDC and NPDC as antecedents are crucial to the robustness of supply chain integration in NPD. This finding is new to supplement the conventional CQD or NPDC approach in selection of supplier. The EngD project has successfully delivered a solution scheme for enriching the selection of supplier with proper antecentants and embeddedness with supplier in new product development (NDP); and leveraging on the process of research, has led the key stakeholders of the firms to gradually taking ownership in driving the knowledge management and supplier integration strategy forward. The development of a framework for achieving the above dual purposes is an attempt to fill a perceived gap in supplier integration frameworks in the literature. While the EngD project reported in this thesis is an industry-focused research, the research approach adopted for the selection of supplier in new product development and adopt the knowledge development capacity (KDC) and new product development capabilities (NPDC) as antecedents delivered are applicable to most of the manufacturing firms, regardless the company size and firm’s product commodity. The EngD project had been carried out under the locale of a possible selection of supplier wit antecedent of KDC and NPDC, especially for the electronic manufacturing services firms. Keywords: Knowledge management, new product development, supplier integration, product innovation, knowledge sharing