The trend in OEM (large original equipment manufacturer) - supplier relations toward "partnering" has created a new role for the manufacturing extension organization in both promoting and supporting this development. This includes the technical support of the individual firm as well as developing supplier networks in cooperation with the OEM's. The key to successful partnering is the knowledge firm - the small supplier with the technical knowledge to participate directly in the design or redesign of the components they are supplying to the OEM's product. This paper will develop a rationale for this relationship, indicate the current issues, and define the future of these relationships in concurrent engineering. Two case studies involving firms with less than 100 employees will be used as examples of successful partnering.