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Implementing concurrent engineering: product development managers need a single, well-defined process with clear ownership and goals.

Concurrent engineering (CE) has been successfully implemented in many companies, including Texas Instruments, Hewlett-Packard, Motorola, and General Motors (1,2). However, despite the well-known practices and benefits that make CE a standard for product development, many firms still face difficulties putting it into practice. Gerwin and Moffat have observed that more studies of companies having problems putting CE into practice are needed (3). While there is an abundance of research available identifying the critical success factors of CE, relatively few authors have focused on its implementation in practice (4).

Concurrent Engineering can be defined as the integration of interrelated functions at the outset of the development process in order to minimize risk and reduce effort downstream in the process, and to better meet customers' needs (5). Multifunctional teams, concurrency of product/process development, integration tools, information technologies, and process coordination are among the elements that enable CE to improve performance (6).

In the traditional sequential engineering (SE) process, there is little or no cross-communication among various functions, and information generated from one activity is handed off to the next only after its completion. The commonly encountered problems with this type of process are increased effort, development time and cost. CE, demonstrated in many cases to overcome the obstacles faced in SE, takes into account the inherent interdependencies that exist between product and process design (5). Though it is more challenging to coordinate a CE process, the potential benefits can be considerable.

We studied the implementation of CE in a medium-size, high-tech company that designs, manufactures and markets innovative networking solutions in virtually every sector of the telecommunications industry. At the time of the study, the company, which we shall call "Telecom," employed over 6,500 people worldwide and had revenues of $1.8 billion. New product development (NPD) was a critical part of its business strategy, and as such, the company was intent on improving NPD performance. Telecom was therefore attempting to implement and formalize a CE environment throughout the organization.

To do this, the company tried ad hoc approaches to implementing CE by undertaking various levels of multifunctional teamwork and overlapping of activities for different projects. There was also some use of design simulation and information technology tools. There was no formal process; rather, various groups applied their personal versions of CE.

In practice, CE approaches vary widely from company to company (2); we found the same within Telcom--CE approaches taken by various internal groups differed significantly. Consequently, Telcom was interested in evaluating how well its isolated CE approaches were faring in comparison to its existing SE process, and whether or not it was worth the time, money and effort to formally implement a standard CE process throughout the organization.

Methodology

Six historical and one ongoing NPD project were studied, each one consisting of 10-15 members, ranging from project leaders to team members. All of the projects involved the design of circuit board assemblies, and were chosen to be comparable in terms of design complexity, manufacturing requirements, and resource requirements. Over a two-year period, data were collected from Telecom documentation, observation of the development and manufacturing processes, interviews with key personnel, surveys, attendance at project meetings, and many informal discussions. From these multiple sources, data were obtained on detailed descriptions of the development process, activities such as hardware and software development and their corresponding durations and probabilities of rework, team and process characteristics, level of information exchange between functional groups, team decision-making processes, tools and technologies, metrics, and organizational support.

Study Findings

Overall, our findings showed that the CE efforts at Telcom, though not consistent across all projects, were more successful in terms of overall project performance than SE projects, where overall performance included time to market (TTM), project development costs, and product quality. Despite the success of CE, however, a number of barriers to its best use also existed. Table 1 compares SE and CE projects in terms of process, methods such as team structure, tools and technology, communication, and the performance measures of TTM, rework and overall project performance.

The study showed that CE projects used a high level of overlapping between design, testing and production activities, had multifunctional teams, made extensive use of tools and technologies, such as design simulation tools and integrated information technologies, and had a high level of two-way communication between functions. Furthermore, the development schedule was reduced for all CE projects compared to SE projects by an average of 36 percent, and overall project performance, which was compared to expected outcomes for each project, was superior for CE as compared to SE. Since the seven projects took place within a 2-3 year period, had product mandates with similar degrees of complexity, and drew upon a similar level of resources, we believe that performance comparisons between projects were based on the differences between the use of SE and CE methods, and not on uncontrolled factors.

Implementation Framework

A framework was developed based on the study's findings to help Telcom focus its efforts while transitioning into a CE environment. While some of the findings presented in this paper are not new, they confirm the results of prior research on the design and management of a CE process. The diagram below shows an overview of the framework.

We focus now on the components of the framework: process, people, tools and technology, metrics, organizational support, buying into CE, and benefits and barriers to success.

Process

A key implementation issue for CE is to have a single, well-defined process with clear ownership and goals. In order to properly implement CE, we recommend:

* Define and formalize the CE process.

* Define overlapping of activities.

* Identify process ownership.

* Set clear, quantitative goals.

The first step in implementing CE is to define the process and the corresponding schedule of activities. The decision on how to manage the development process by overlapping activities must be carefully evaluated; that is, how and when the various activities should be overlapped so that the design is completed as effectively and as efficiently as possible, and all foreseeable risks are considered early. While overlapping takes place in a CE process, the study showed that this proved to be successful as long as there was a high level of communication among functions. In one project, development time was reduced by two months through overlapping with a high level of communication.

Importantly, there are situations in which overlapping is not beneficial. For one project, there was a delay of 45 days because two activities were overlapped. This was because the changes in the upstream activity meant significant changes were required in the downstream activity, which had already been complete as a result of the overlapping. Therefore, it is crucial that the downstream impact on executing activities in parallel be considered carefully prior to overlapping.

After the CE process is defined, it must be formalized and standardized. A formal NPD process is a must and has been proven to separate the market leaders from the "dogs" (7). A standardized process delivers better quality projects, which in turn means better quality products (8). Without this, development is executed on an hoc basis, which results in similar projects following different steps.

A process owner needs to be appointed for the CE NPD process. Lack of ownership contributes to a lack of project discipline. A single person needs to be responsible so that team members are clear on whom to address when facing a problem. This person's responsibility is also to see that the process is used properly and that it is updated as needs change. Absence of ownership can create problems, such as team members not being held accountable for missing information. A process owner has responsibility for the end-to-end process along with all sub-processes. This results in better responsiveness to the customer and better learning for ongoing process improvement.

Finally, vague goals tend not to lead to tangible improvements. Only quantified goals have been shown to lead to improved performance. For example, objectives such as 20-percent TTM improvement or a six-month reduction in cycle time received the attention of project leaders and team members; qualitative or soft targets did not. Goals must focus on process improvement in addition to product quality and deliverables.

People

In a CE process, utilizing the appropriate human resources at the right time is critical and accelerates development by keeping rework to a minimum. A successful CE environment requires managers to:

* Determine functional involvement and staffing requirements.

* Establish multifunctional teams early.

The key issue regarding project teams is having the right people up and running early in the process. It is important to evaluate how much up-front involvement is really required such that downstream functions are neither wasting their time nor causing extra effort to be expended due to their presence early in the process. By involving the manufacturing function early, design issues and process capability can be resolved in order to handle new parts. Long lead time parts can also be ordered early by integrating the purchasing agent early in the process, ensuring that no shortages occur, that new technology is available, and that project schedules can be met.

While it is often thought that CE teams should include design and manufacturing personnel only, study results showed that external customers and suppliers and the marketing function should be integrated as well in order to finalize customer requirements more quickly. Often, CE teams are chosen to be composed of highly skilled individuals who could communicate well. Capturing the experience of these teams through a formalized process is important for transferring knowledge to teams that are less skilled. Finally, projects that have dedicated teams are more successful. Resource planning is a critical issue for completing projects on time and on budget.

Early integration of various disciplines prevents downstream problems from occurring and recognizes risks and opportunities early in the process. CE teams should thus be created at project kick-off meetings to familiarize the members with the project and with one another.

Tools and technology

An appropriate set of tools and technology should be chosen to help achieve maximum benefits that enable integrated product development. It is necessary to:

* Identify tools and technology that enable CE.

* Train people to use the tools.

The use of integrated information technology (IT) tools enables the management of a CE process to be smoother. Effective data sharing techniques are critical to the storage, retrieval and transfer of information. Essentially, the use of IT helps to minimize the need for communication among team members by reducing and often eliminating the need to meet, speak over the phone, wait for mail, etc. Given the highly interdependent phases of the product development process, minimizing communication is appealing. Because of the complexity involved in coordinating many people's activities, less communication results in less time spent and lowers the potential for confusion. Integrating these tools completely with a minimum number of user interfaces will improve productivity, which in turn will help to better realize goals. A project web site can also be very effective in providing access to project information.

Simulation has proven to be very successful in the design of circuit boards--time was cut significantly and quality improved. By tradition, in some companies, there is an urgency in getting prototypes built early so that the hardware team can sooner tackle potential problems that are uncovered; consequently, simulation is not emphasized because the time it requires delays building prototypes. However, although more time is required at the front end of the design cycle, simulation uncovers many design deficiencies not easily detected in the laboratory, and the resulting stability of the prototypes can reduce the time and the effort needed to complete development. Even if time reduction is not achieved with simulation, cost savings (fewer prototypes built) and higher quality can be achieved. To make effective use of all tools, training is essential.

Metrics

To successfully monitor progress and improve performance, it is essential to define relevant performance measures.

Because measuring performance can directly affect the behavior of teams, choosing metrics to encourage certain behavior can help to achieve specific objectives. However, other unwanted behavior can result. For example, being rewarded on meeting goals does not mean that the process for achieving those goals will be productive and efficient.

A CE process requires goal-oriented metrics (to monitor outcomes), such as time-to-market (TTM), break-even time, and manufacturing costs, and process-oriented metrics (to monitor the process), such as rework, the degree of functional integration, and dynamic TTM (a tool that forecasts TTM at any point in time during a project to give an instantaneous view of how it is performing with respect to delivery). In many companies, information for metrics is gathered on a product release basis rather than on a project basis; therefore, it is important to begin extracting pertinent information early in the process and maintaining the availability of this information.

To be effective, the number of metrics considered by teams should be small, on the order of four to six. A general guideline for measurements is that, if they change every week, they should be measured once a week; if they change every month, they should be measured monthly, and so on.

Organizational support

Another key implementation issue is to ensure that the right structures exist to support and motivate CE teams. The organizational support required to ensure and to sustain CE success consists of:

* Empowering teams.

* Facilitating communication.

* Implementing team reward mechanisms.

The decision-making power that is granted to teams indicates the degree of team autonomy. Teams are the most knowledgeable about a project and are in the best position to make decisions; they work best when given the authority to make their own decisions (9). This also helps to accelerate the process and avoid unnecessary delays in waiting for decisions to be made through layers of management. Accountability for any decisions must be upheld.

"Communication is the cornerstone of success in CE," writes Prasad (10). CE needs to be carried out in an environment in which communication and collaboration among departments is facilitated. This requires shared data environments and open information exchange. Effective communication can be achieved through shared data environments and through the quality and structure of inter- and intra-group communication. Additionally, CE projects benefit from high-frequency, face-to-face and two-way communication among team members. Co-location of key functions and team meetings is therefore important. Our study showed that communication is critical for closely coupled teams; as an example, the separation of hardware and software teams by even a single floor was seen as a major obstacle.

A system that will reward team performance in addition to the already-existing functional reward system is important in a CE environment. This implies that the team leader must have some say in the performance appraisal since she or he, or the team, is in the best position to evaluate an individual's performance on the team. One suggestion is to let the team leader write a performance appraisal, and let the functional manager decide how much weight it should be given. Rewarding teams on break-even time is one mechanism to tie team performance to long-range success, and to motivate members to be committed to projects.

Buying into CE

It is crucial to get buy-in from everyone involved in order for CE to work. This means that:

* Executive support for CE is a must.

* Continuous training is required.

Buying into a CE approach does not always come easy for upper management (10). Top functional managers, for example, often feel threatened by the empowerment of multifunctional teams in a CE environment. Some managers fear that they do not have power over decisions being made and that they will still be penalized for poor outcomes. To overcome this, an appropriate division of authority, responsibility and rewards between managers and teams is needed. In addition, for permanent change, the people involved must be trained continuously.

Benefits and barriers to success

Table 2 summarizes the views from project team members on the benefits of and barriers to CE as well as suggestions to overcome the barriers. As can be seen, the barriers outnumbered the benefits, suggesting that transitioning to a CE environment is not without its challenges. However, the benefits show that the use of CE can produce highly desirable outcomes, among others, reduced time to market. Overcoming the barriers would likely further improve overall performance.

Significant Rewards

Implementing concurrent engineering is complex, but the potential rewards are significant. Overall, the study showed that CE projects were more successful than SE projects at then pseudonymous Telecom. Our study shows that for successful CE implementation, process, people, tools and technology, metrics, organizational support, and buy-in, are all critical managerial considerations prior to and during CE implementation.

References

(1.) Trygg, L. 1993. Concurrent Engineering Practices in Selected Swedish Companies: A Movement or an Activity of the Few? Journal of Product Innovation Management 10(5), pp. 403-415.

(2.) Swink, M. L., Sandvig, J. C. and Mabert, V. A. 1996. Customizing Concurrent Engineering Processes: Five Case Studies. Journal of Product Innovation Management 13, pp. 229-244.

(3.) Gerwin, D. and Moffat, L. 1997. Withdrawal of Team Autonomy During Concurrent Engineering. Management Science, 43(9), pp. 1275-1287.

(4.) Bessant, J. and D. Francis. 1997. Implementing the new product development process. Technovation 17(4), pp. 189-197.

(5.) Winner, R. I., J. P. Pennell, H. E. Bertrand and M. M. G. Slusarezuk. 1988. The Role of Concurrent Engineering in Weapons System Acquisition. Institute for Defense Analyses, Alexandria, VA, U.S.A. IDA Report R-338.

(6.) Blackburn J. 1991. New Product Development: The New Time Wars, in J. Blackburn (ed.). Time-Based Competition: The Next Battleground in American Manufacturing. Homewood: Business One Irwin.

(7.) Cooper, R. G. and Kleinschmidt, E. J. 1995. Benchmarking the Firm's Critical Success Factors in New Product Development. Journal of Product Innovation Management 12, pp. 374-391.

(8.) Bhuiyan, N. and Thomson, V. 1998. Formalizing and Evaluating the Concurrent Engineering Process. Proceedings of the Canadian Society for Mechanical Engineering 3, pp. 1-6.

(9.) Gerwin, D. 1999. Team Empowerment in New Product Development. Business Horizons 42(4), pp. 29-36.

(10.) Prasad, B. 1997. Concurrent Engineering Fundamentals--Integrated Product Development. New Jersey: Prentice Hall PTR.

Nadia Bhuiyan is an assistant professor at Concordia University in the Department of Mechanical and Industrial Engineering and the associate director of the Concordia Institute for Aerospace and Design Innovation (CIADI), in Montreal, Canada. Previously, she taught at Queen's University's School of Business, and McGill's Department of Management Science. Her research area is mainly in operations management, with a focus on new product development processes, and emerging tools and techniques for integrating design and manufacturing to improve process performance. She holds a master's degree and a Ph.D. both in mechanical engineering from McGill University, and a bachelor's degree in industrial engineering from Concordia University. bhuiyan@alcor.concordia.ca

Vince Thomson is the Werner Graupe Professor for Manufacturing Automation in the Department of Mechanical Engineering at McGill University. He has been involved in manufacturing and information technology related research for the past 25 years at McGill and the National Research Council (Canada). His research has ranged from shop floor control and production scheduling to the current interest in process management in manufacturing. In process management, his research has focused on new product introduction, concurrent engineering and manufacturing support in terms of coordination, metrics and process principles. vincent.thomson@mcgill.ca

Donald Gerwin is professor emeritus in the School of Business at Carleton University in Ottawa, Canada and now lives in France. At Carleton he held a research chair in technology management and headed the research program in managing technological change. He has served as the department editor for manufacturing systems for the IEEE Transactions on Engineering Management and as an associate editor for Management Science. He is co-author of Management of Advanced Manufacturing Technology: Strategy Organization and Innovation. His current research interests are in managing new product development within and between firms, dgerwin@sprott.carleton.ca
Table 1.--Comparing Concurrent and Sequential Engineering Projects

 Team Tools and
 Process Structure Technology

CE Extensive Multifunctional Extensive
Projects overlapping teams use

SE Low level of Functional Little use
Projects overlapping teams

 Number
 Communication Time to of Project
 Patterns Market Respins * Performance

CE Frequent, two-way 9 months 1 to 2 Above
Projects between R&D and average
 Manufacturing
SE Infrequent, one-way 14 months 3 Below
Projects between R&D and average
 Manufacturing

* Respins = major iterations within the NPD process

Table 2--Benefits of and Barriers to CE Implementation.

Benefits of CE

* Schedules reduced for all CE projects.

* Delivery of defect-free prototypes accelerated.

* Production yields improved.

* Time to market shorter.

Why Benefits Were Achieved

Early involvement increased planning horizon and
learning.

Risks identified and tradeoffs made earlier.

Specifications mostly correct because all functions present.

Constant involvement of operations delivered correct
prototypes on time.

Operations and Testing assisted in finding design problems
before layout began.

Production issues resolved early.

Barriers

Lack of business unit and top management support.

Requirements hard to set at concept stage.

Lack of control of project resources.

Lack of interaction between hardware and software groups.

Lack of involvement by Marketing at project start.

CE not well understood.

Overcoming the Barriers

Create a multifunctional team at project outset.

Define member responsibilities clearly.

Dedicate necessary resources.

Improve NPD process.

Define requirements earlier.

Improve team communication.

Improve interaction between hardware and software
groups.

Train members better: skills, IT tools and CE methods.
improve IT tools.

Increase use of simulation tools.
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Comment:Implementing concurrent engineering: product development managers need a single, well-defined process with clear ownership and goals.
Author:Bhuiyan, Nadia; Thomson, Vince; Gerwin, Donald
Publication:Research-Technology Management
Geographic Code:1USA
Date:Jan 1, 2006
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