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Communication and Uncertainty in Concurrent Engineering

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Author Info

  • Christoph H. Loch

    (INSEAD, Boulevard de Constance, 77305 Fontainebleau, France)

  • Christian Terwiesch

    (The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania 19104-6366)

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    Abstract

    We present an analytical model of concurrent engineering, where an upstream and a down-stream task are overlapped to minimize time-to-market. The gain from overlapping activities must be weighed against the delay from rework that results from proceeding in parallel based on preliminary information. Communication reduces the negative effect of rework at the expense of communication time. We derive the optimal levels of concurrency combined with communication, and we analyze how these two decisions interact in the presence of uncertainty and dependence. Uncertainty is modeled via the average rate of engineering changes, and its reduction via the change of the modification rate over time. In addition, we model dependence by the impact the modifications impose on the downstream task. The model yields three main results. First, we present a dynamic decision rule for determining the optimal meeting schedule. The optimal meeting frequency follows the frequency of engineering changes over time, and it increases with the levels of uncertainty and dependence. Second, we derive the optimal concurrency between activities when communication follows the optimal pattern described by our decision rule. Uncertainty and dependence make concurrency less attractive, reducing the optimal overlap. However, the speed of uncertainty reduction may increase or decrease optimal overlap. Third, choosing communication and concurrency separately prevents achieving the optimal time-to-market, resulting in a need for coordination.

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    File URL: http://dx.doi.org/10.1287/mnsc.44.8.1032
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 44 (1998)
    Issue (Month): 8 (August)
    Pages: 1032-1048

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    Handle: RePEc:inm:ormnsc:v:44:y:1998:i:8:p:1032-1048

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    Related research

    Keywords: Product Development; Concurrent Engineering; Simultaneous Engineering; Overlapping; Communication Policy; Frontloading; Engineering Changes; Optimization;

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    Citations

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    Cited by:
    1. Rauniar, Rupak & Doll, William & Rawski, Greg & Hong, Paul, 2008. "Shared knowledge and product design glitches in integrated product development," International Journal of Production Economics, Elsevier, vol. 114(2), pages 723-736, August.
    2. Susan Bogus & Keith Molenaar & James Diekmann, 2006. "Strategies for overlapping dependent design activities," Construction Management and Economics, Taylor & Francis Journals, vol. 24(8), pages 829-837.
    3. Paulo J. Gomes & Nitin R. Joglekar, 2008. "Linking modularity with problem solving and coordination efforts," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(5), pages 443-457.
    4. Sosa, Manuel E., 2003. "Factors that influence technical communication in distributed product development : an empirical study in the telecommunications industry," Working papers WP 4123-00., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    5. Ki H. Kang & Jina Kang, 2009. "Does Partner Type Matter in R&D Collaboration for Product Innovation?," TEMEP Discussion Papers 200906, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Aug 2009.
    6. de Brito, Marisa P. & Carbone, Valentina & Blanquart, Corinne Meunier, 2008. "Towards a sustainable fashion retail supply chain in Europe: Organisation and performance," International Journal of Production Economics, Elsevier, vol. 114(2), pages 534-553, August.
    7. Joglekar, Nitindra R., 2003. "Performance of coupled product development activities with a deadline," Working papers WP 4122-00., Massachusetts Institute of Technology (MIT), Sloan School of Management.
    8. Valle, Sandra & Vázquez-Bustelo, Daniel, 2009. "Concurrent engineering performance: Incremental versus radical innovation," International Journal of Production Economics, Elsevier, vol. 119(1), pages 136-148, May.
    9. Bordoloi, Sanjeev & Guerrero, Hector H., 2008. "Design for control: A new perspective on process and product innovation," International Journal of Production Economics, Elsevier, vol. 113(1), pages 346-358, May.

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