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Managing Experimentation in the Design of New Products

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  • Stefan H. Thomke

    (Technology and Operations Management, Harvard Business School, Soldiers Field Road, Boston, Massachusetts 02163)

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    Abstract

    Experimentation, a form of problem-solving, is a fundamental innovation activity and accounts for a significant part of total innovation cost and time. In many fields, the economics of experimentation are being radically affected by the use of new and greatly improved versions of methods such as computer simulation, mass screening, and rapid prototyping. This paper shows that a given experiment (and the related trial and error learning) can be conducted in different "modes" (e.g., computer simulation and rapid prototyping) and that users will find it economical to optimize the switching between these modes as to reduce total product development cost and time. The findings are confirmed by a large-scale empirical study of the experimentation process in the design of integrated circuits containing either (1) electrically programmable logic devices (EPLDs); or (2) application-specific integrated circuits (ASICs). In comparing their different experimentation strategies for analogous design projects, I found that the former (EPLD)---an approach that utilizes many prototype iterations---outperformed the latter (ASIC) by factor of 2.2 (in person-months) and over 43 percent of that difference can be attributed to differences in experimentation strategies. The implications for managerial practice and theory are discussed and suggestions for further research undertakings are provided.

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    File URL: http://dx.doi.org/10.1287/mnsc.44.6.743
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 44 (1998)
    Issue (Month): 6 (June)
    Pages: 743-762

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    Handle: RePEc:inm:ormnsc:v:44:y:1998:i:6:p:743-762

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    Related research

    Keywords: Experimentation Economics; Product Design and Development; Computer Simulation; Prototyping; Mode Switching; Iterative Learning;

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    Cited by:
    1. Pascal Le Masson & Patrick Cogez & Yacine Felk & Benoît Weil, 2012. "Revisiting Absorptive Capacity with a Design Perspective," Post-Print hal-00870353, HAL.
    2. D'Adderio, Luciana, 2001. "Crafting the virtual prototype: how firms integrate knowledge and capabilities across organisational boundaries," Research Policy, Elsevier, vol. 30(9), pages 1409-1424, December.
    3. Cacciatori, Eugenia, 2008. "Memory objects in project environments: Storing, retrieving and adapting learning in project-based firms," Research Policy, Elsevier, vol. 37(9), pages 1591-1601, October.
    4. Schmickl, Christina & Kieser, Alfred, 2008. "How much do specialists have to learn from each other when they jointly develop radical product innovations?," Research Policy, Elsevier, vol. 37(3), pages 473-491, April.
    5. Becker, Markus C. & Salvatore, Pasquale & Zirpoli, Francesco, 2005. "The impact of virtual simulation tools on problem-solving and new product development organization," Research Policy, Elsevier, vol. 34(9), pages 1305-1321, November.
    6. Von Hippel, Eric A. & Katz, Ralph, 2002. "Shifting Innovation to Users Via Toolkits," Working papers 4232-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    7. Steven Callander, 2011. "Searching and Learning by Trial and Error," American Economic Review, American Economic Association, vol. 101(6), pages 2277-2308, October.
    8. Crossan, Mary & Cunha, Joao Vieira da & Cunha, Miguel Pina e & Vera, Dusya, 2002. "Time and Organizational Improvisation," FEUNL Working Paper Series wp410, Universidade Nova de Lisboa, Faculdade de Economia.
    9. Cartier, Manuel, 2003. "Entre innovation radicale et innovation tirée par le marché : simulation de l’évolution d’une population de projets," Economics Papers from University Paris Dauphine 123456789/1132, Paris Dauphine University.
    10. repec:hal:gemptp:hal-00641765 is not listed on IDEAS

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