Stefan H. Thomke

The Effect of "Front-Loading" Problem-Solving on Product Development Performance

In recent years, there has been a growing interest in the link between problemsolving capabilities and product development performance. In this article, the authors apply a problem-solving perspective to the management of product development and suggest how shifting the identification and solving of problems—a concept that they define as front-loading—can reduce development time and cost and thus free up resources to be more innovative in the marketplace. The authors develop a framework of front-loading problem-solving and present related examples and case evidence from development practice. These examples include Boeing’s and Chrysler’s experience with the use of “digital mock-ups” to identify interference problems that are very costly to solve if identified further downstream—sometimes as late as during or—after first full-scale assembly. In the article, the authors propose that front-loading can be achieved using a number of different approaches, two of which are discussed in detail: (1) projectto-project knowledge transfer —leverage previous projects by transferring problem and solution-specific information to new projects; and (2) rapid problemsolving—leverage advanced technologies and methods to increase the overall rate at which development problems are identified and solved. Methods for improvingproject-to-project knowledge transfer include the effective use of “postmortems,” which are records of post-project learning and thus can be instrumental in carrying forward the knowledge from current and past projects. As the article suggests, rapid problem-solvingcan be achieved by optimally combining new technologies (such as computer simulation) that allow for faster problemsolving cycles with traditional technologies (such as late stage prototypes), which usually provide higher fidelity. A field study of front-loading at Toyota Motor Corporation shows how a systematic effort to front-load its development process has, in effect, shifted problem-identification and problem-solving to earlier stages of product development. They conclude the article with a discussion of other approaches to frontload problem-solving in product development and propose how a problem-solving perspective can help managers to build capabilities for higher development performance.

Agile Product Development: Managing Development Flexibility in Uncertain Environments:

As product complexity and the rate of market change have dramatically increased over the last years, firms find it increasingly difficult to forecast product requirements in their development processes. This article redefines the problem from one of improving forecasting to one of increasing product development agility and thus reducing the need for accurate long-term forecasts. It introduces the notion of development flexibility, shows how it can be measured, and presents results from a large empirical study on integrated systems development, which found that projects using flexible technologies outperformed projects using inflexible technologies by a factor of 2.2 (in person-months). Finally, the article proposes three major strategies for introducing flexibility into organizations. These strategies can help firms increase their agility and position themselves to succeed in accelerating and more turbulent markets.

Original ArticlesThe effect of “front-loading” problem-solving on product development performance

Abstract In recent years, there has been a growing interest in the link between problem-solving capabilities and product development performance. In this article, the authors apply a problem-solving perspective to the management of product development and suggest how shifting the identification and solving of problems—a concept that they define as front-loading—can reduce development time and cost and thus free up resources to be more innovative in the marketplace. The authors develop a framework of front-loading problem-solving and present related examples and case evidence from development practice. These examples include Boeing’s and Chrysler’s experience with the use of “digital mock-ups” to identify interference problems that are very costly to solve if identified further downstream—sometimes as late as during or—after first full-scale assembly. In the article, the authors propose that front-loading can be achieved using a number of different approaches, two of which are discussed in detail: (1) project-to-project knowledge transfer—leverage previous projects by transferring problem and solution-specific information to new projects; and (2) rapid problem-solving—leverage advanced technologies and methods to increase the overall rate at which development problems are identified and solved. Methods for improving project-to-project knowledge transfer include the effective use of “postmortems,” which are records of post-project learning and thus can be instrumental in carrying forward the knowledge from current and past projects. As the article suggests, rapid problem-solving can be achieved by optimally combining new technologies (such as computer simulation) that allow for faster problem-solving cycles with traditional technologies (such as late stage prototypes), which usually provide higher fidelity. A field study of front-loading at Toyota Motor Corporation shows how a systematic effort to front-load its development process has, in effect, shifted problem-identification and problem-solving to earlier stages of product development. They conclude the article with a discussion of other approaches to front-load problem-solving in product development and propose how a problem-solving perspective can help managers to build capabilities for higher development performance.

The role of flexibility in the development of new products: An empirical study

Abstract Although flexibility and firm competitiveness have been linked by a considerable body of research, most efforts to advance our understanding of flexibility have been focused on manufacturing, the economics of firms, and competitive strategy. This paper examines the link between technology and flexibility during product design and its impact on development performance and strategies for managing development risk, particularly in environments of high uncertainty. Using “the incremental cost and time of modifying a design as a response to endogenous and exogenous change” as a measure of flexibility, I compared analogous development projects from a large-scale empirical study of integrated circuit (IC) design. It was found that projects using flexible design technologies outperformed projects using inflexible technologies by a factor of 2.2 (in person-months) and over 23% of that difference can be attributed to differences in managing the risk of design changes: high flexibility enabled designers to tolerate high levels of risk, whereas low flexibility resulted in significantly higher resource investments that were aimed at minimizing the risk of design changes. The implications for managerial theory and practice are discussed and approaches that would allow firms to enhance design flexibility are proposed.

Parallel and Sequential Testing of Design Alternatives

An important managerial problem in product design in the extent to which testing activities are carried out in parallel or in series. Parallel testing has the advantage of proceeding more rapidly than serial testing but does not take advantage of the potential for learning between tests, thus resulting in a larger number of tests. We model this trade-off in the form of a dynamic program and derive the optimal testing strategy (or mix of parallel and serial testing) that minimizes both the total cost and time of testing. We derive the optimal testing strategy as a function of testing cost, prior knowledge, and testing lead time. Using information theory to measure the test efficiency, we further show that in the case of imperfect testing (due to noise or simulated test conditions), the attractiveness of parallel strategies decreases. Finally, we analyze the relationship between testing strategies and the structure of design hierarchy. We show that a key benefit of modular product architecture lies in the reduction of testing cost.

Modes of experimentation: an innovation process, and competitive, variable

Abstract The outputs of R&D, such as new research findings and new products and services, are generated with the aid of specialized problem-solving processes. These processes are somewhat arcane and have been largely ignored in studies of technical change. However, their improvement can significantly affect the kinds of research problems that can be addressed, the efficiency and speed with which R&D can be performed, and the competitive positions of firms employing them. In this paper, we first describe the general nature of the trial-and-error problem-solving processes and strategies for experimentation used in the development of new products and services. We next discuss the rapid advances being made in problem-solving methods, and the impact such advances can have on the competitive position of adopting firms. Finally, we offer a detailed case study of the impact one novel experimental method, combinatorial chemistry, is having on the economics of the drug discovery process.

The Mixed Effects of Inconsistency on Experimentation in Organizations

This paper examines how the inconsistency of organizational conditions affects peoples willingness to engage in experimentation, a behavior integral to innovation. Because failures are inevitable in the experimentation process, we argue that conditions giving rise to psychological safety reduce fear of failure and promote experimentation. Based on this reasoning, we suggest that inconsistent organizational conditions--when some support experimentation and others do not--inhibit experimentation behaviors. An exploratory study in the field, followed by a laboratory experiment, found that individuals under high evaluative pressure were less likely to experiment when normative values and instrumental rewards were inconsistent in supporting experimentation. In contrast, individuals under low evaluative pressure responded to inconsistent conditions with increased experimentation. Our results suggest that evaluative pressure fundamentally alters an individuals experience of and response to uncertainty and that understanding experimentation behavior requires examining effects of multiple organizational conditions in combination.

Simulation, learning and R&D performance: Evidence from automotive development

Abstract As pressure to conduct research and development (R&D) faster and more efficiently has increased over the years, firms have embraced many novel technologies and approaches in an attempt to develop new capabilities that would give them an advantage over their competitors. While the connection between building and renewing capability and performance has been shown in a number of different settings, the contents and routines of many such capabilities have not been studied in detail and the processes by which these capabilities lead to performance gains are still somewhat unclear. In this paper, I will try to provide a better understanding of one rapidly emerging capability—the ability to utilize advanced simulation in R&D—and examine how it can affect performance and the associated learning process. With the aid of a detailed empirical study in the area of automotive development, I will show that computer simulation is already having a dramatic impact in at least one very critical area—the design for crashworthiness—and is rapidly changing other important fields as well. First , by speeding up and simultaneously reducing the cost of design iterations, developers can increase the frequency of problem-solving cycles while reducing the total amount of time and money spent on R&D. Second , the ability to conduct more diverse experiments with novel technical possibilities and to learn more effectively than with alternative methods can lead to better R&D output. The implications for managerial practice are discussed and suggestions for further research undertakings are provided.

Sequential Testing in Product Development

A fundamental problem in managing product development is the optimal timing, frequency, and fidelity of sequential testing activities that are carried out to evaluate novel product concepts and designs. In this paper, we develop a mathematical model that treats testing as an activity that generates information about technical and customer-need related problems. An analysis of the model results in several important findings. First, optimal testing strategies need to balance the tension between several variables, including the increasing cost of redesign, the cost of a test as function of fidelity, and the correlation between sequential tests. Second, a simple form of our model results in an EOQ-like result: The optimal number of tests called the Economic Testing Frequency or ETF is the square root of the ratio of avoidable cost and the cost of a test. Third, the relationship between sequential tests can have an impact on optimal testing strategies. If sequential tests are increasing refinements of one another, managers should invest their budgets in a few high-fidelity tests, whereas if the tests identify problems independently of one another it may be more effective if developers carry out a higher number of lower-fidelity tests. Using examples, the implications for managerial practice are discussed and suggestions for further research undertakings are provided.

The impact of design technologies on product development performance and strategy

In the development of novel products, managers can often choose among different design technologies. However, these technology choices are typically driven by their impact on product performance as opposed to how they would affect the product development process. Using empirical data from integrated circuit design, the author shows that the selection of a particular design technology can have a very significant impact on experimentation strategies, design flexibility, and development performance.