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The Role of uncertainty reduction in concurrent engineering: an analytical model and an empirical test

Author: Terwiesch, Christian ; Loch, Christoph H.INSEAD Area: Technology and Operations Management Series: Working Paper ; 96/17/TM Publisher: Fontainebleau : INSEAD, 1996.Language: EnglishDescription: 32 p.Type of document: INSEAD Working Paper Online Access: Click here Abstract: Concurrent engineering, or overlapping development activities, is a widely discussed tool to reduce development leadtime. However, overlapping may not be beneficial if the overlapped activities are uncertain and not independent. This article develops a model of two overlapping development activities. Uncertainty is incorporated via the average rate of engineering changes that occur in the upstream activity, creating rework for downstream. Dependence is modeled by the delaying impact these modifications impose on the downstream activity. The model predicts that the effectiveness of overlapping activities in reducing overall development time is moderated by the organization's capability to reduce uncertainty early upstream. Further, fast uncertainty reduction makes it optimal to use more overlap. These effects of uncertainty reduction are tested on data drawn from 140 completed development projects across several global electronics industries
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Concurrent engineering, or overlapping development activities, is a widely discussed tool to reduce development leadtime. However, overlapping may not be beneficial if the overlapped activities are uncertain and not independent. This article develops a model of two overlapping development activities. Uncertainty is incorporated via the average rate of engineering changes that occur in the upstream activity, creating rework for downstream. Dependence is modeled by the delaying impact these modifications impose on the downstream activity. The model predicts that the effectiveness of overlapping activities in reducing overall development time is moderated by the organization's capability to reduce uncertainty early upstream. Further, fast uncertainty reduction makes it optimal to use more overlap. These effects of uncertainty reduction are tested on data drawn from 140 completed development projects across several global electronics industries

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