Concurrent Engineering

AuthorKoenraad Debackere, Andrea Schurr
Pages112-115

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Concurrent engineering is a method by which several teams within an organization work simultaneously to develop new products and services. By engaging in multiple aspects of development concurrently, the amount of time involved in getting a new product

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to the market is decreased significantly. In markets where customers value time compression, fast-cycle developers have a distinct advantage. Additionally, in many high-technology areas such as electronics and telecommunications, product-technology performance is continuously increasing and price levels are dropping almost daily. In such areas, a firm's ability to sustain its competitive edge largely depends on the timely introduction of new or improved products and technologies. More and more, the time parameter makes the difference between mere survival and substantial profit generation. Concurrent engineering is a key method for meeting this need of shortening a new product's time-to-market.

SEQUENTIAL NEW PRODUCTDEVELOPMENT

In the past, commercial success was practically guaranteed for companies that could design, develop, and manufacture high-quality products that satisfied real needs at competitive prices. However, beginning in the early 1990s this traditional formula radically changed as time-to-market became a vital component of commercial success. Studies have demonstrated that being a few months late to market is much worse than having a 50 percent cost overrun when these overruns are related to financial performance over the lifecycle of a new product or service. In other words, time has become a key driver of competitive success, from design and development to the actual launch of a new product or service.

Traditional project planning and execution has been marked by the definition of objectives and mile-stones. These goals are met through a progression of networked activities, some of which must be performed sequentially, others of which may be conducted in parallel. Planning techniques such as Program Evaluation and Review Technique (PERT), Graphical Evaluation and Review Technique (GERT), and Critical Path Method (CPM) have been used to support this sequencing of tasks and activities. However, until the beginning of the 1990s time compression was not a major issue in the new product development environment. In the planning and scheduling of tasks and activities, any time compression concerns were only implicitly present.

CONCURRENT NEW PRODUCTDEVELOPMENT

Because time has become a competitive weapon, time pressures have become central to the project-based new product development organization. These pressures have led to the explicit understanding that time compression is a driver of project (and subsequent business) performance. As a consequence, methods, techniques, and organizational approaches have been designed and developed that allow for time compression needs to be handled in a proper manner. All time-centered approaches have one principle in common...

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