journal collaborative engineering a case study of ce

8/3/2019 Journal Collaborative Engineering a Case Study of CE

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.J. Eng. Technol. Manage. 15 1998 87109

Collaborative engineering: A case study ofConcurrent Engineering in a wider context

Stephan S.A. Willaert a,), Rob de Graaf b, Simon Minderhoud c

a

Philips Centre for Manufacturing Technology, Department Production Systems, P.O. Box 218,5600 MD Eindhoen, Netherlands

bEricsson Telecommunication B.V., Research and Deelopment, P.O. Box 8, 5120 AA Rijen, Netherlands

cPhilips Centre for Manufacturing Technology, Department Deelopment Support, P.O. Box 218,

5600 MD Eindhoen, Netherlands

Abstract

.Concurrent Engineering CE is considered to be important for any engineering company

wishing to survive in the present market. The continuing market pressure for reducing costs,improving quality and reducing time to market throughout the product life cycle is threatening

engineering companies. CE has many aspects and is more a management and engineering

philosophy to conquer the market pressure than a tool. Recent implementation efforts revealed that .CE alone can not lead to maximum benefits. Therefore Collaborative Engineering CE II is

introduced, placing CE in a wider context. This wider context is not obtainable from recent

publications, they only show one side of CE. This one sided view in the literature leads to

sub-optimization and misinterpretation. Based on 200 recent publications, the development, goals,

and dimensions of CE are outlined. Furthermore, implementation efforts, as well as a view to

indicate the most likely future developments are presented. q 1998 Elsevier Science B.V.

Keywords: Concurrent Engineering; Collaborative Engineering; Product development process; Continuous

improvement; Management of change

1. Introduction

.Many articles have recently been published concerning Concurrent Engineering CE ,

but they fail to put CE in a wider context. The lack of this wider context can lead to

misunderstanding, sub-optimization and wrong interpretation of the management and

engineering philosophy called CE. In the literature several synonyms for CE are used,

)

Corresponding author. Tel.: q31-40-2737469; fax.: q31-40-2735103; e-mail: [email protected].

0923-4748r98r$19.00 q 1998 Elsevier Science B.V. All rights reserved. .PII S 0 9 2 3 - 4 7 4 8 9 7 0 0 0 2 6 - X


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( )S.S.A. Willaert et al.r J. Eng. Technol. Manage. 15 1998 8710988

.like Concurrent Product Development Anonymous, 1993e or Simultaneous Engineer- .ing Bergstrom, 1989 . Publications are mostly concerned with the historical develop-

ment, the goals and definitions, the forces behind CE, the tools that relate to CE, and the

implementation efforts. A majority of all CE related publications describe information .technology IT as the main dimension of CE. The truth is, IT enables CE, but it does

.not create it Rasmus, 1993a . All together these issues supersede the usual CEdefinitions and therefore a wider context definition is necessary.

1.1. Problem statement

Two problems can occur when reviewing CE literature. The first one is that recent

literature can lead to misunderstanding, sub-optimization and wrong interpretation

because of the one-sided views presented. The other problem is that most implementa-

tion efforts described have been successful. These successful implementation efforts

could give the impression that any CE drive has been successful.Sub-optimization and wrong implementation of CE principles do not lead to lower

costs, better quality products andror shorter time-to-market, although these items are

vital for the survival of engineering companies. Full understanding of CE is therefore

necessary. This understanding of CE is obtained by putting it in a wider context.

In this paper the reasons for implementing CE are illustrated first; next, the

dimensions of CE are described. These descriptions lead to a review of CE definitions

and to the definition of Collaborative Engineering in Section 4. The implementation

efforts are presented in Section 5. The Future developments are regarded in Section 6.

Finally, in Section 7, conclusions regarding CE and Collaborative Engineering aredrawn.

2. Necessity of CE in product development

The challenge facing American and European management today is to ensure that

their organizations remain competitive in a rapidly changing and volatile climate .Leppitt, 1993 . Many competitors exist and markets are not homogeneous, but frag-

mented into increasingly focused niches requiring greater flexibility in the product mix,shorter production runs and higher product quality. Hitting the market first with the right

product is extremely important in highly competitive industries such as IC manufactur- .ing Baskerville, 1993; Vesey, 1991 . The Western engineering companies were losing

market share because they did not respond to the market, the customers, in the way the .Japanese did Lewis, 1993; O Neal, 1993; Stuelpnagel, 1993 . Satisfying customers

requires capturing the needs of these customers and looks at the whole product lifecycle, until the needs are satisfied Handfield, 1993; McClenahen, 1993; Hof, 1992;

.Cook, 1991; Evanczuk, 1990 .

To remain competitive, a company has to be innovative, giving attention to productcost, product and process quality, flexibility in the product mix and new solutions. It is

not possible to be an innovating company without giving major attention to the first

three criteria. The battle for the customer is to be fought through speedy innovation,


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( )S.S.A. Willaert et al.r J. Eng. Technol. Manage. 15 1998 87109 89

Fig. 1. Overlapping phases in product development.

based on the Japanese model. The dominant elements of the Japanese innovation model

are: . Overlapping phases of product development Fig. 1 ;

A wide range of suppliers capable of supplying sophisticated components;

Firm-specific and factory-specific incremental innovation;

Long-term partnerships with suppliers; . Extensive information sharing Bowonder and Miyake, 1992 .

It is not easy for American and European companies to just implement what theJapanese have done. The problem is that they know what the Japanese have done, but

little attention is given to how the Japanese have done it. The Western companies want

to be where they are, right now, and they do not realize that it took the Japanese many

years to get where they are, one small step at a time. Furthermore, they did it in such a

fashion that they did not cut anyones head off if there was not sufficient improvement .Bergstrom, 1990 .

Product development is the key to increase the pace of product introduction to deal

with shorter product lives. Page described Product Development as the process that

converts a generally specified market need or ideas into satisfactory manufacturableproducts, through the application of scientific, technical and creative principles, ac-

knowledging requirements set by later life cycle processes. According to Pages research .on New Product Development NPD the majority of 168 US manufacturers determine

.seven consecutive activities Page, 1993 . In Pages definition Product Development is

preceded by 4 phases setting up the requirements and testing feasibility for the new

product. Product Development then transforms these requirements into a product that

can be tested and eventually be commercialized. Table 1 illustrates the consecutive

phases in NPD. The order of the phases only illustrates the timing of the start of each

activity, as phases may overlap during execution.Each industry has its own bench-mark for the ideal product development cycle Daly,

.1992 . Manufacturing competitiveness must start with product design. The cure for poor

quality does not rest in better process controls but in elimination or simplification of the


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Table 1

New product development phases in US manufacturing companies

Phase Major activity

I Concept search

II Concept screening

III Concept testingIV Business analysis

V Product development

VI Product use testing, field testing, andror market testing

VII Commercialization

.process in the early design stages Raia, 1993 . The pressure for reducing the cycle time

of product development, engineering and manufacturing has made it necessary to

improve the integration of these functions and to manage the interfaces. To achieve

integration, Japanese firms use what is known as CE. CE involves overlapping various

stages of developing new products to reduce delays. This reduction of delays is achieved

by intensive communication. CE has been cited as the main reason for the rapid newproduct introductions by Japanese firms Bowonder and Miyake, 1993; Rhodes, 1992;

.Vesey, 1991 . For example, a key factor behind the success of Japanese auto makers istheir short time required to develop a new model with high product quality Gehani,

.1992; Izuchukwu, 1992 .

3. Dimensions of CE

The main elements of CE are the attention to the customer, the organization of the

company and the supplier. Besides these three elements there is another important

dimension, namely the information infrastructure. This infrastructure is necessary to

communicate among the three parties and to communicate inside the organization. The

dimension of organizational can be split into management and teams.

3.1. Customer

The primary motive of a business is to make a profit and the customer is the only .person who is willing to pay for the companys products Lewis, 1993 . Many new

products fail, despite the best efforts, for one idiotsimple reason: the customer does not .want them Anonymous, 1993e,f; Dyer et al., 1993; Guy and Dale, 1993; Daly, 1992 .

Customers are demanding innovative products with exceptional quality at competitive

cost. Surviving for engineering companies depends on getting to the market first withproducts that the customer wants Anderson, 1993; Handfield, 1993; McClenahen, 1993;

.Mills et al., 1993; Smith and Jones, 1993; Yesersky, 1993 . One of the reasonscompanies were not customer focused is because they have never had to compete,

because they were holding a monopolistic position like AT& T, and therefore had .forgotten how to put the customers needs first Baskerville, 1993; Stuelpnagel, 1993 .


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Companies have found several ways to capture customer requirements, mostly carriedout by the marketing department Bowonder and Miyake, 1993; Alpert, 1992; Anony-

.mous, 1992b, 1990b . A sharp market understanding ensures that companies understand

their customers, identify market segments, and develop products that serve those .segments well Hume, 1993 . In the automobile sector, the Cadillac Motor Division

.listens to what customers in the showrooms are saying Anderson, 1993 . Feedback fromvehicle buyers is brought back to the design teams through phone interviews and

surveys that track customer satisfaction. These, along with warranty databases, identify

specific engineering challenges. An other way to capture customers needs, is to test a .product on a test market to obtain a rapid market feedback Anonymous, 1993h .

Adding customers to the team, if possible from the beginning of Product Develop-ment, is the best way to understand the customer O Neal, 1993; Hudak, 1992; Kalthoff,

. .1992 . At Boeing potential customers help to design aircrafts Anonymous, 1993g . CE

by involving a multi-disciplined team in the development process, improves the transla-

tion from the customers needs and wants to the completed product Anonymous, 1993b;.deJong, 1993; Krishnaswamy and Elshennamy, 1992; Pastore, 1993; Rhodes, 1992 . To

fulfill the customers needs is the goal for todays companies Freedman, 1993; Rasmus,

1993b; Ashley, 1992; Baer, 1992; Gould, 1992; Bergstrom, 1990; Evanczuk, 1990;.Greene, 1990 .

.A frequently used tool is Quality Function Deployment QFD . The QFD technique is

carried out to ensure that customer requirements are considered when decisions aremade which define the quality and performance characteristics of the product Anderson,

.1993; Krishnaswamy and Elshennamy, 1993; Dean, 1992; Place, 1992; Sweeney, 1992 .

One of the most commonly reported advantages of using QFD is that it systematicallyreduces the number of changes as a design enters production, in some cases up to 50%,

.consequently decreasing the time needed to get a design into production Trygg, 1993 .

3.2. Organization

The organization is another dimension of CE. The most important items in relation toCE are management and teams Brown, 1993; Trygg, 1993; Anonymous, 1992b; Yeh,

.1992; Alter, 1991; Ziemke and McCollum, 1990 . The aim of management is to provide

the framework in which teams can perform. They must stand up and take personal .responsibility for innovation Anonymous, 1993f; Evans, 1993; Garrett, 1990 . The team

structure is seen as the best way to reach the goals of CE. People are the most important .issue in product development Isbell, 1993; McCune, 1993 .

3.2.1. Management

Managements role in the CE philosophy is to commission, to counsel, motivate and .mediate when needed to keep the teams focused on their goals Rhodes, 1992 .

Management has to define and present the team goal Baskerville, 1993; Hume, 1993;

.Evanczuk, 1990 . Management has to make clear that they support and believe in the .team Anonymous, 1993e; Kochan, 1991 . Management also has to set up a measure-

.ment system Lavallee, 1993; Trygg, 1993; McKnight and Jackson, 1989 . The product .development process itself should be left to the team Evans, 1993; Webb, 1992 . If


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managers are not capable or willing to make and support these changes, then there is no .other choice but to replace them Yesersky, 1993 . Management should also empower

the teams, that is, their decisions must not be overridden by management Mills, 1993;.Anonymous, 1990a .

The companys reward system has to change when people are working in teams. The

reward system should be based on the team result and the individual behavior in thatteam. Rewards do not have to be monetary to be motivators. Some individuals are

motivated by the personal satisfaction of having accomplished something that others

thought impossible to achieve. Whatever the reward is, it must be presented publicly by

management, stating how the individual or team achieved the objective, its impact on

the organization, and why efforts of this type are needed for corporate growth and .competitiveness Hudak, 1992; Owen, 1992 .

3.2.2. Teams

Individuals work in work groups, under the traditional system of management. Theleader delegates all assignments, reviews performance and is the pivot of all the groups

communication. With this system, creativity and initiative take a backseat as staff-gener-

ated ideas and suggestions often languish, waiting for management to take action. Work

teams, on the other hand, warrant a fundamental shift in roles and authority. A good

team has synergy and the foresight to identify, address, and resolve issues through the

entire product life-cycle. However, putting a team together does not guarantee team-work; a team that exists in name only is not a team Sharples, 1993; Stewart, 1993;

.Hudak, 1992 . Teams with team leaders whose functional jobs and team responsibilities

.have a high degree of overlap tend to be the most successful Anonymous, 1992b .Building a team can not be done instantly. Several companies have their own philosophy

to build a team. For instance, team building at Ingersoll-Rand is done by attending horse

races and hockey games together and visiting the team leaders home to swim, play

basketball, or cook outdoors. In fact, the team officially recognizes barbecues as .instrumental to team building and the success of their project Anderson, 1993 . Team

building at Cadillac Motor Division is done by jeans days, on which engineers trade in

their suits and ties for jeans and work shirts and join assemblers on the plant floor.

Working side by side with shopfloor employees gave the engineers firsthand knowledge

.of design glitches Dyer, 1995, Anderson, 1993 . This pattern of team formation isknown as Forming, storming, norming and performing and generally takes several

months.

A multidisciplinary team must balance all aspects of the Product Development .Sharples, 1993; Yeh, 1992 . Therefore, team members must have a strong background

in the products design, manufacture, or support Anonymous, 1993f; Beckert, 1993;

Krishnaswamy and Elshennamy, 1993; Anonymous, 1990a; Garrett, 1990; Greene,. .1990 . These people are also known as the Renaissance Engineers Cook, 1991 . Team

members should be multi-functional, experienced, disciplined, and open to negotiation.

The team should be formed as early as possible in Product Development Anderson,.1993; Evans, 1993; Yesersky, 1993; Braham, 1992 . All team members will have greater

.responsibility Pastore, 1993; Peterson, 1993 . The facility engineer is another crucial

member of the CE team. Through continuous interaction with process engineering, the


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facility engineer can alleviate constraints that would not be detected under the traditional

design approach until the assembly engineer was finished. Early attention to these

constraints during process engineering can save extensive renovation, great expense and .substantial engineering hours McKnight and Jackson, 1989 .

The size of a team is an important factor. If teams are too large, they may become

unmanageable and require a structure to perform in. If teams are too small, this maystifle creativity. A workable team has between six and fifteen members depending on the

size of project and complexity of the product Baskerville, 1993; Yesersky, 1993; Hof,.1992 . This number is good for problem-solving, decision-making as well as open and

.spontaneous communications Hudak, 1992 . The number of teams depends on the type

of company. For instance the 1992 Buick Lesabre was simultaneously designed by 50 .teams, averaging six members per team Moskal, 1992 .

The team leaders goal is to emphasize the key issue for the project, e.g., manufac-

turability. The qualifications for the team leader differ from the qualifications of the

individual team members. The team leader should have a broad-based background,diverse contacts, and technical expertise. Most importantly, he or she must have

leadership abilities to successfully drive the project through to completion McClenahen,.1993; Biancini, 1992; Gorman, 1992; Schamisso, 1992 .

A team member must have specific qualifications to work in a team. He or she must .have technical skills, but must not be a specialist Anonymous, 1990a . Japanese

companies avoid overspecialization of engineers and other functions by routinely .moving people among various projects and functions Stewart, 1993 . Job rotationby

taking engineers out of engineering and placing them in other disciplines such as sales,

marketing, and purchasingis a good system to improve the output of a teamAnderson, 1993; Anonymous, 1993b; Baskerville, 1993; Trygg, 1993; Anonymous,

.1992b . What is needed are people who can keep the big view in perspective.

3.3. Supplier

To gain the full advantages of CE the role of the supplier is vital Kempfer, 1993b;.Khermouch, 1993; O Neal, 1993; McKnight and Jackson, 1989 . It is not advisable to

improve the design to manufacturing process without paying attention to the companys

.suppliers Handfield, 1993 . They play an important role in the success or failure of .implementing CE, as they do with any development project Ellis, 1993 . Failing to

communicate with suppliers can prove very costly, because it can lead to needlessly

complex components to manufacture, late deliveries as well as quality and quantity .problems Guy and Dale, 1993; Schamisso, 1992; Bergstrom, 1990 . Several companies

have already experienced the benefits of good supplier relations, like the Robertshaw .Division, Bose and Motorola Anonymous, 1993b; O Neal, 1993; Raia, 1991 . Good

suppliers not only provide parts; they provide process knowledge and product compo-

nent innovation, which is their real stock-in-trade. To fully demonstrate their expertise,

suppliers must be involved early in the product development cycle Raia, 1993; Engel,.1991 .

To develop a successful relationship with a supplier, it is necessary to reduce the

number of suppliers in the suppliers base, involve these suppliers in product and process


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design decisions, and create an environment of mutual trust O Neal, 1993; Rasmus,.1993a; Meade, 1989 . The basic criteria for selecting suppliers are technical capability,

track record, financial strength and their flexibility. The supplier base must be treated as

an extension of the organization. The supplier must see the longer term relationship with

the buying organization as being in its best interest, over the obvious one of generating

.short-term sales revenue Guy and Dale, 1993 . A good relationship must and can be .financially rewarding for both parties Engel, 1991 . The supplier performance is

typically measured by accuracy, product cost, quality, and on-time delivery. Product cost

alone is not a good determinant of supplier performance. The two critical measures of

supplier performance observed were: Incoming product quality and on-time delivery. Ofthese two factors, quality is critical for selecting the supplier Handfield, 1993; Raia,

.1991 .Companies like Bose take the relationship with their suppliers to another level O

.Neal, 1993 . They have an in-plant representative who takes on the roles of purchasing,

sales, and production planning. As an empowered facilitator, this in-plant representativecan help develop better coordination between the supplier and customer company

. .employees Stein, 1993 . This relationship is also known as Just In Time II JIT II .

JIT II brings the vendor into the plant to sit in the purchasing office of the customer

on a full-time basis, integrating purchasing and sales. The on-site supplier attends all

design engineering meetings involving its companys products, with full access to all

facilities, personnel, and data. The advantages are administrative savings and continuous

reduction of material costs. An additional advantage is improving communications. The

benefits for the supplier include elimination of sales effort; the ability to sell directly to

engineering; efficient invoicing and payment administration, which means less paper-work. Improved communication, easy purchase order placement, and increased business

volume are also advantages for the supplier. The key element of JIT II is not only

having a supplier located inside, but having the supplier empowered within purchasing

as the link between the customers development and planning departments and the .suppliers production plan Stein, 1993 .

3.4. Information Infrastructure

The dimension of information infrastructure supports and nourishes other dimensions.However, when the information infrastructure is not balanced, the process of collabora-

tion can break down, and the development teams can lose their effectiveness. This can

result in a loss of product functionality, problems during testing, delays in manufactur-ing, and a loss of customers Dyer et al., 1993; Krishnaswamy and Elshennamy, 1993;

.Anonymous, 1992b . This means communication is probably the single most important

asset of a business. To communicate successfully, ideas must be spoken out or written

up precisely. Successful communication is the foundation of rallying the team andmakes working together successful Godfrey, 1993; Kempfer, 1993a; Rasmus, 1993a;

.Kempfer, 1992; Bergstrom, 1989 . Communication involves identification and definitionof mission-critical data. All members of the team need to have the same terminology .Beckert, 1993; Dicesare, 1993; Gorman, 1992 . This sharing of information is essential

for CE. It can prevent reinventing the wheel by providing easy data access and search


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capabilities. An important trend in computing for engineering is the evolution ofstandards. These standards consider the interchange of data, text and graphics Gould,

.1992 . Open systems standards avoid the customer being locked in to one vendor and

encourage greater portability of applications software from one computer to another. In

relation to CE three subjects, related to information infrastructure, are mainly publicized

namely: Collocation tools;

Coordination tools;

Information access and corporate memory.

3.4.1. Collocation toolsThe location of the team is an important factor to improve communication Alter,

.1991; Ziemke and Spann, 1991 . At General Motors design engineers and manufacturing .engineers work in the same office, usually within ten ft of each other Alpert, 1992 . At

AT&T there is a 50-yard rule that means that the probability of communication amongteam members decreases by 80% when team members are more than 50 yards apart .Hudak, 1992; Owen, 1992 . To improve communication among team members that are

.far apart e.g., different countries , CERC researchers are working on a virtual colloca- .tion system called MONET meeting on the network . In the absence of enabling tools

that allow virtual collocation of the development team members, extensive use of

electronic mail can be extremely effective in communicating information between the .participants Dicesare, 1993; Ashley, 1992 .

Besides the communication in a team it is also important to have a structured

.interaction with suppliers and in some cases customers Engel, 1991; Evanczuk, 1990 .Failing to communicate with suppliers and customers can prove very costly indeed.

Electronic Data Interchange through dedicated or internet applications is a useful tool .for improving the link with suppliers Ellis, 1993 .

3.4.2. Coordination tools

Though concurrent access to product information sounds impressive, a few observers

suggest wider views. The real propellant behind CE is not just modeling but datamanagement. Managing data efficiently and ease-of-use are the real challenges Anony-

.mous, 1992a; Davis, 1992 . At first all the information was stored at different places andanyone could make changes in the information system, which lead to configuration and

documentation difficulties. To solve these problems product information management

has been developed. It assists in product structure control and configuration manage-

ment, and in routing design information from group to group. With product information

management tools, companies can reduce engineering change order turnarounds and .backlog, as well as eliminate lost documents. PIM Product Information Management

systems improve the visibility of product information in the design process Brown,.1993; deJong, 1993; Hunter, 1993; Prasad et al., 1993; Cook, 1991 .

3.4.3. Information access and corporate memory

A team can not exist without communication. In the past dedicated analysts worked

separately from the design team, often re-creating design information for their analysis


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needs. This was a time-consuming and costly way of working Beckert, 1993; Alter,.1991 . To make the team concept work, technical information had to be more accessible

.to all parties involved Anderson, 1993; Freedman, 1993; Parker, 1993; Gould, 1992 .This means that each department can extract the information it needs Anonymous,

.1992a; Mabert et al., 1992 .

Besides the information necessary to design and manufacture products it is also vitalto document every decision made during Product Development. This is typically done

after the project ends, and team members often leave out steps, which make the records

less useful. There are companies, GE for instance, that use an electronic design notebook

to store all the design choices. This running account enables others to query the project

rationale later to check for similar work done earlier and capturing lessons learned .Dicesare, 1993; Ashley, 1992 .

4. CE definition

4.1. Goals for CE

What is the ultimate goal of CE and what are the drivers of CE? Usually the goal is .to improve quality, reduce manufacturing costs, or improve reliability Godfrey, 1993 .

The literature gives several goals and drivers of CE. The situations and companies the

authors are referring to cause this variety of goals and drivers. Not all companies have

reached the ultimate goal of CE, but one can identify three main goals of CE which are:

Lower product costs throughout the total life cycle; Better product quality;

Shorter time-to-market.

Product functionality improvement is not the sole focus, improving the manufacturing .process is also considered Yeh, 1992 . There are some derived goals but they can be

carried back to the main three. The goal a company is striving to achieve depends on the

specific situation in that company, the complexity of the product, and the market it is in.

Ultimately, control over the three issues is desired.

Competitive pressures and decreasing commercial product life cycles are spawning a

new vision. Product Development is now the critical factor in influencing product cost.As a result, designers are adopting tools and techniques that enhance their ability to

.evaluate cost and development criteria, such as manufacturability Bogard et al., 1991 .

If CE principles are implemented, it means that most product changes occur in the early

stages when they are easily and inexpensively made. Fewer prototypes are needed, and

the ones built often require fine-tuning only. Others stress that CE is becoming anecessity as products and their development processes grow more complex Anony-

.mous, 1992b; Czajkowski and Tipps, 1992; Izuchukwu, 1992 .

Overall, CE brings greater speed and productivity to a companys product develop-

.ment Anonymous, 1993a; O Neal, 1993; Barlow, 1992 . Redesign of a product is costlyand time-consuming when it has to be done after the design phase. This redesign can be

necessary because of manufacturing restrictions, or to streamline the manufacturing .process Engel, 1991 . CE exposes the costs of the design process early in the


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development stage. It reduces expenses and schedule over-runs, enabling more projects .to be completed on time and within budget Davis, 1992 .

Some companies implement CE for quality reasons. For example, quality improve- .ment is the driving force for CE at Ford Anderson, 1993; Izuchukwu, 1992 . Quality

improvement can be obtained when the multiple disciplines responsible for product

development are working in a team. Some companies found that although the originalgoal was to improve their manufacturing productivity and quality, it had now shifted to

.improving time-to-market Anonymous, 1993e .

Shorter time-to-market is the main driver and the most important goal for companies .to implement CE Anonymous, 1993d . To get competitive, companies might have to

.divide their time to market by two Anonymous, 1993d . The importance of getting

through each turn of the product development cycle quicker than a competitor can make

a company start overtaking the industry leader, even if they start out with an inferior .product Izuchukwu, 1992 . Time to market can mean competitive success or failure

.Kirkland, 1992 . The rapid escalation of global competition is, as stated before,demanding dramatic reductions in the time-to-market cycle, along with higher quality

levels and lower costs. Anecdotal evidence points to CE, complemented by early

purchasing and supplier involvement, as an approach with tremendous potential in

addressing the three key issue of time, quality, and cost. The two most significant

features of CE are customer focus and cycle time reduction, respectively doing the rightthings and doing them right the first time, focusing on cycle time reduction Mills et al.,

.1993; O Neal, 1993 . Customers nowadays are demanding innovative products with .exceptional quality at competitive product costs Yesersky, 1993 .

4.2. Definitions

CE is not a new term. It is generally understood to embrace a collection of

approaches, techniques, tools, and methods aimed at improving the total value chain in .product development Leppitt, 1993 . CE is a management and engineering philosophy

.Godfrey, 1993; Gould, 1992; Hudak, 1992 . CE has been set up mainly by the US .Department of Defense DoD to enable its suppliers to produce better products at lower

cost within shorter time. This was mainly due to the decreasing DoD budget. Winner

defines CE as:

A systematic approach to the integrated, concurrent design of products and their

related processes, including manufacturing and support. This approach is intended

to cause the developers, from the outset, to consider all elements of the product

life cycle from conception through disposal, including quality, cost, schedule, and .user requirements Dicesare, 1993 .

Many definitions of CE have been given since Winner. Multiple design attributes

have been introduced that are or should be considered during CE. Frequently addressed

attributes are manufacturability, serviceability, upgradeability, reusability, and reliability .Dowlatshahi, 1993 . In essence, CE addresses Product Development efficiency: quickly

translating customer requirements into manufacturable products by cross functional

collaboration. CE is a strategic issue, which demands up front investments to reap long


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.term benefits Ellis, 1993; Yesersky, 1993; Brooks, 1990 . This business strategyrequires integration of people, business methods, and information technology Ellis and

.Curtis, 1992; Feru et al., 1992; Wheelwright and Clark, 1992 . Cleetus CE definition .1992 , addresses these issues:

CE is a systematic approach to the integrated and concurrent development of aproduct and its related processes, that emphasizes response to customer expecta-

tions and embodies team values of cooperation, trust, and sharing in such a

manner that decision making proceeds with large intervals of parallel working by

all life-cycle perspectives, synchronized by comparatively brief exchanges to .produce consensus. Cleetus, 1992 .

4.3. CE II: CE in a wider context

Cleetus definition of CE can still be stretched further. His definition does not addressthe drivers for CE: control over life-cycle cost, product quality, and time to market .Lawson and Karandikar, 1994; Dicesare, 1993 . In addition, the enabling role of

.information technology is not directly specified Kempfer, 1993a . Furthermore, supplier

involvement is not explicitly mentioned, even though supplier input is vital for achieving .optimized designs O Neal, 1993; Raia, 1993 . When these items are to be addressed in

a definition of CE, this will certainly lead to confusion.

Most decisions made during Product Development affect life cycle perspectives, and

thus require input and evaluation by all life-cycle disciplines. Decision making should

therefore proceed collaboratively. A new term that emphasizes collaboration not justconcurrency is desired. Therefore Collaborative Engineering is introduced:

Collaborative Engineering is a systematic approach to control life cycle cost,

product quality and time to market during Product Development, by concurrently

developing products and their related processes with response to customer expecta-

tions, where decision making ensures input and evaluation by all life-cycle

disciplines, including suppliers, and information technology is applied to support

information exchange where necessary.

This extended definition of CE can be compared with the definition of Manufacturing .Resource Planning MRP II that was derived from Material Requirements Planning

. .MRP I Bertrand et al., 1990 . Like Collaborative Engineering, MRP II addresses

multiple disciplines. Collaborative Engineering will thus be referenced as CE II.

5. Implementation issues

5.1. Introduction

Improving quality was, for some companies, the initial driving force behind the

development of CE concepts. With increasing global competition, companies began

looking closer at CE and realized that the technique was more than a way to improve


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.quality. It became evident that if a systems approach total life cycle design was applied

to CE the concerns of cost and deliveryrcompletion time could also be attacked. This

approach provided the capability to simultaneously address the three areas of quality, .cost and delivery time into the product development Dicesare, 1993 .

A company must first be efficient; after becoming efficient, the company has to

produce quality products and in the next phase a company has to be flexible. This meansthat a company cannot be flexible if it is not efficient and quality conscious. If a

company has passed through these three phases then it is possible to be an innovating

company. This leads to the ultimate goal of CE, which is to create products for thecustomers and to do this regarding product cost, quality and flexibility Anderson, 1993;

.Smith and Jones, 1993; Stuelpnagel, 1993; Anonymous, 1992a .

Commercial companies in Japan, Europe and the US have adopted CE like tech- .niques since the late seventies. Furthermore the US Department of Defense DoD has

initiated several CE initiatives for their suppliers. First the commercial applications will

be presented and then some attention will be given to the DoD initiatives.Japanese car manufacturers were among the first to adopt CE techniques. In the late

seventies, both Honda and Mazda began operating with CE like methods, and in 1987

Nissan followed their example. Japanese successes forced US car companies to apply

the technique in the mid 80s. In recent years, European firms BMW, Opel and

Daimler-Benz have also started to move in the direction of implementing CE. But CE

success is not limited to the auto industry only. Matsushita in Japan, Rank, Xerox,

Boeing, General Electric, IBM and Digital Equipment in the United States, and Philips .in Europe are also enthusiastic supporters Kochan, 1991 . Some companies even

provide extensive success stories in the literature. To show how CE practices mightlook, Caterpillar, Chrysler, GE Aircraft Engines, IBM ECAT, and Philips Consumer

Electronics are presented below for illustrative purposes.

The cases presented in Section 5.2 are examples from successful implementations,

but should not imply that there are no drawbacks in the implementation of CE, far from

that. It only reveals the benefits gained and not the hurdles that had to be taken.

5.2. Commercial companies

Caterpillars mid range engine division has reduced lead time from 60 to 48 monthsand stabilized that performance. These results were presented at the CE Battle Plan 93

. .conference Benneth, 1993 and in Manufacturing Engineering Owen, 1993 . Caterpil-

lar implemented ISO 9000 to become the carrier of change in the organization.

Furthermore, a matrix structure was implemented and research, systems, and process

development were separated.

With the Viper, Chrysler has demonstrated that a concept car can be in full

production in under three years, without taking up all of its already small development .budget Sprow, 1992 . Up-front communication resolved problems in the teams even

before they occurred, and constant reviews by experts assured product quality andmanufacturability. Vendors were also brought into the development teams as was

.illustrated in Purchasing Raia, 1992 . The Viper project was used as an organizational

test-bed for CE within the whole company.


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Table 2

Review of benefits gained at several companies

Caterpillar Chrysler GE GEAE IBM ECAT Philips

Viper Hasselt

Time 6048 months -3 yr 58% reduction 289 months 5034 weeks

Cost y -US$50 m y productivity up 70% Cost price 15% downQuality ISO 9000 manufacturing more early y FMEA engineering

yield up iterations changes

Control 48 stable 3-3 risk management y risk management

Other researchrr supplier y 1985 reusable software

designrr involvement introductions

engineering

.General Electric Aircraft Engines GEAE reduced development lead-time by 58%

and improved product quality simultaneously. A case study of the pilot project at theHollow Airfoil Facility is exhibited in the General Electric Pilot Project Case Study

.Report Erkes, 1993 , other results were published in Aviation Week and Space

Technology. They participated in the DICE program to provide a pilot project to

demonstrate the advantages of CE concepts and technology. More design iterations were

made early in the development cycle, and risk reduction was embodied within the

development projects.

IBM ECAT increased the number of new product introductions per year dramatically,

from 19 in 1988 to 85 in 1992. Also cycle-time had been reduced from 28 to 9 months

in that period. Production volumes had gone up 160%, with productivity rising almost70%, reducing the support staff to 40% of what it was in 1988. IBM presented its

.changes in product development at the CE Battle Plan 93 conference Austin, 1993 . In .InfoWorld La Plante, 1993 the role of CAE tools in redesigning the business was

discussed. Leaving the functional structure and implementing a product oriented process

were key factors to their success.

Finally, Philips Consumer Electronics in Hasselt, Belgium has started implementing

CE in late 1993. First results were shortening development lead-time from 50 to 34

weeks for a CD-Interactive player, and increasing product quality at the same time.

Teams were set up and trained with tools, such as enhanced Failure Mode and Effect .Analysis FMEA , risk management and activity driven scheduling. In addition a solid

modeling CAD system was introduced, an object oriented specification and design .method for reusable key components in software, was initiated Schrijver, 1995 . In

Table 2 a review of the benefits gained at these companies is given.

5.3. Goernmental efforts

Besides these initiatives at several commercial companies, the American Department

of Defence started CE initiatives. The Defense Advanced Research Project Agency .DARPA funds an initiative to change the Product Development process. This initiative

.is called the DARPA Initiative in CE DICE . The DICE mission is to develop, validate,

and disseminate technologies that encourage the use of CE in the design and manufac-


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Fig. 2. The relationship between CALS; CE and Total Quality Management.

ture of defence related products. The goal is to create a CE environment where cost

efficiencies and productivity gains will be achieved, leading to more competitively .priced products or services and faster delivery Dicesare, 1993 .

The results of DICE are an array of CE related tools and services that allow product

development team members to communicate with each other instantly on networks, and

to access, share and store up-to-date information in a transparent way, independent fromgeographical separation, organizational structure, product complexity, or incompatible

tools, data bases, and computing resources. A major milestone in the DICE project was

the establishment of the CE research center at West Virginia University. One of CERCs

missions is to serve as the national focal point for promoting the acceptance of CE .related technology and best practice Ashley, 1992 .

Another initiative mandated by the DoD, was the CALS Computer-Aided Logistics.and Support initiative. CALS has two major deliverables. First, CALS provides a

framework of standards for inter-operability between information systems, essential to

. .support CE in the value chain Izuchukwu, 1992 Fig. 2 . Second, companies involvedin CALS work on integrating and coordinating their organizational processes within this

framework. Especially where large defense contracts are to be won, effective coopera-

tion between the various partners is of major importance.

5.4. Benefits and drawbacks

Product Development has finally been identified as an important business process in

the last decade. Marketers identified changes in the market place that placed newdemands on the Product Development process. Time to Market had become a competi-

tive item. Missing out on market windows can result in major decreases in return on

investment. This leads to a shorter commercial life-cycle.


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Table 3

Derived benefits from implementing Concurrent Engineering

Benefit type Benefits gained

Development time 30 to 70% less

Time to market 20 to 90% less

White-collar productivity 20 to 110% higherDollar sales 5 to 50% higher

Return on assets 20 to 120% higher

Manufacturing costs up to 40% higher

Overall quality 200 to 600% higher

Engineering changes 65 to 90% fewer

Scrap and re-work up to 75% fewer

There are numerous benefits gained from implementing CE. These benefits can be

categorized in lower costs; better quality and shorter time-to-market. These three .categories are the most important drivers of CE Evanczuk, 1990 . However, there are

drawbacks, mainly concerned with increasing risks. But if CE is implemented right, the

benefits will exceed the drawbacks. The literature mainly reports the benefits, which .should ultimately improve customer satisfaction Anonymous, 1993h . A small improve-

.ment in the customer satisfaction can drive profits up extensively O Neal, 1993 .Furthermore, early product introductions help to gain customer loyalty Ellis and Curtis,

.1992 .

There are several benefits a company can derive from using the CE approach. Nevens

illustrated that the first company that introduced a new type of car stereo in theEuropean market, could earn 20% more on their product than a competitor following

.one year later Nevens, 1990 . Benefits reported from implementing CE differ stronglyper company. Table 3 lists the major benefits reported Anonymous, 1993g; Caston,

.1993; Ellis, 1993; O Neal, 1993; Bogard et al., 1991 . Because of the CE approach, the

process that will be used to manufacture the product can be optimized from the

beginning. The use of CE makes it possible to consider the investment, marketing and

business plans early in the product design process. This means that the design is not only .manufacturable, it is also cost effective Feru et al., 1992 .

However, there are disadvantages to CE that must be considered. Too often, thetemptation is to implement CE without a full understanding of the efforts and risks.

Perhaps the most significant disadvantage is possible increased development risk.

Because many activities occur in parallel, or in overlapping phases, all open issues must

be resolved before the project moves to the next phase. This means allocating more .resources at the beginning of the project where more decisions are made Hudak, 1992 .

The risks occur when a company encounters pitfalls.

The five most known pitfalls are:

unobtainable-schedule;

changing-product-ineffective-team; requirements;

business-as-usual vendoring; . automate-everything Owen, 1992 .


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Companies that have implemented CE show additional pitfalls:

supplier dependent lead-time;

reward systems do not support teams;

lack of information technology support;

project improvement in stead of process improvement;

. discontinued change Graaf, 1995 .

5.5. Need for change management

To arrive at the desired balance of the dimensions of CE, it is necessary to manage

the forces of change. Commitment to CE and to changing the old methods is the most .important factor in managing CE Ellis, 1993; Hartley, 1992; Alter, 1991 .

Not all CE efforts have been successful, this is mainly caused by ill defined

implementation plans. The reason organizations are hard to change has been best

described by Argyris. He has written about how individuals in companies, even highly

educated professionals, engage in what he calls organizational defensive routines to

preserve their status and abiding sense of security. Organizations defend themselves

against change, not because they are just like insecure individuals, but because they are .made up of individuals which work in a way that always has worked Martin, 1993 . To

implement CE successfully it is necessary to pay attention to several guidelines. . Organizations go through several stages in implementing CE Fig. 3 Karandikar et

.al., 1993 . The first step is awareness, where the company is acquainted with CE and

multidisciplined teams. The company then tries to acquire and evaluate the strengths and

weaknesses of the company. Next, getting the approval and support implementationfrom top-level management is essential for success, without executive endorsement it

never works. The push for introducing CE has to come from the top Anonymous,.1993e; Anonymous, 1993f . Once the go-ahead is given multidisciplinary teams can be

Fig. 3. The different stages of implementing Concurrent Engineering.


18/23


formed and a project manager who is not only responsible but also has the authority to .make necessary changes can be appointed Anonymous, 1993e, 1990a .

The individual team members have to be trained in skills like project management; .problem solving; conflict resolution; communication; etc. Anderson, 1993 . Besides

these training sessions, the appropriate methods and tools have to be implemented into

the team. Next the teams become a managed part of this process, team members need toaccept individual responsibility based on team goals and must realize that individual

dependencies exist. But responsibility does not stop at the individual level. Team

members need to expand their responsibility. Eventually, teams and the process get to

the point where success can be measured by benchmarks such as cost, performance, and

quality of the product. At this time it may be possible to measure how well the team isworking together in terms of coordination and collaboration Anonymous, 1992b;

.Evanczuk, 1990 .

The first CE project that will be carried out in the organization is very important for

the success of CE in that organization. Pilot projects are a common theme amongst CEimplementations. They allow a quick start, generate quick results and most importantly

.they allow the organization to learn Evans, 1993 . This project should be a challenging

one that has a chance for success. Some companies use a program that had low customer

satisfaction and was threatened with cancellation. The first project is a learning process, .and there will be some wrinkles along the way Anonymous, 1993e, 1992b .

Effectively implementing a CE program is one of the prime factors in achieving

world class leadership in the global arena. Successful implementation hinges on the .effective coordination of technology, processes, and people Gorman, 1992 . When the

forces of change are managed as described above it is possible to arrive at the desiredCE level.

6. Further developments: networks

6.1. CE in the extended enterprise

The developments that will occur in the future can be summarized in Networks. Thecompanies of the future will have to co-operate more with their suppliers, their

customers, and other relevant parties.

The organizational structure will show several changes. Because of improved com-

munication systems, the distance between the different locations can be larger. Thecompany of the future will be a manufacturer with a very flat organization Vasilash,

.1988 . The integrated information flow, will completely be geared towards the customer.

In the company of the future, the plant manager does not have an idea of the productvolume. His mission will be to help the organization to get its job done McClenahen,

.1993 .The suppliers in the future will become partners and create strategic alliances. The

communication between the suppliers and the company will improve so suppliers can

participate in the product development process as early as possible.


19/23


The customers of today will be the designers of tomorrow. The company has to

set-up modules that customers can use to configure their specific product. One Japanese

manufacturer of prefabricated houses allows customers to sit down in a real-estate

agents office and draw customized architectural plans on a computer tied into the

factory. The house is then built at the factory in three days and is ready for occupancy in

a few weeks, including site preparation. A similar concept drives TextilerClothing .2Technology, known as TC . The organization is working on a system that will enable

customers to walk into a retail outlet and design their own suits by customizing one of a

number of patterns. They will do this by dressing up a computer-based 3-D image of

themselves. The resulting data will then drive automated fabric cutters and sewing .machines at an experimental factory Freedman, 1993 .

6.2. Agile manufacturing

A company will have to cooperate with other companies, even competitors, and buildrelations like their relations with the suppliers and the customer. Inter-firm cooperation

for the integration of skills or competencies has been the major strategic response ofJapanese firms to rapid changes in technologies Bowonder and Miyake, 1993;

.Bergstrom, 1989 . Even for large companies it is virtually impossible to execute all

design activities themselves. This leads to core competencies and thus to the necessity of

cooperating with other companies. Cooperation with other companies results in the

formation of extended enterprises where each party is responsible for a subset of the .Product Development activities Bertrand et al., 1990 . Ensuring information exchange,

without endangering the position of each participating firm, becomes one of the keydilemmas in Product Development. This trend can even lead to Agile Manufacturing,

where each chain activity, i.e., marketing, Product Development, production, sales, and

service can be executed by a different party for each project. This further emphasizes the .importance of knowledge centers Goldman and Preiss, 1991 .

The increasing environmental concern will see more alliances between the manufac- .turer and recycling companies Anonymous, 1993c . Product disposal has become

meaningful in Product Development. First of all because legislation is forcing manufac- .turers to dispose of their product after use Ashley, 1992 . This may become a burden as

cost of discarding worn out products are rising. Reuse of components or base materials .must therefore be addressed during Product Development Ron, 1994 . The company

that rapidly develops its necessary network will have the best chance to become a

winning company.

7. Conclusion

In the beginning of the 1980s market pressure lead to struggling companies.

Redefining their businesses lead to high unemployment in the early and mid 1980s.Large companies in the USA and Europe changed, amongst other things, their product

development process. The management and engineering philosophy that is often used is

known as CE. Early implementation efforts revealed a large difference between benefits


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gained from implementing CE. This is caused by misinterpretation and wrong imple-

mentation of CE. To avoid misinterpretation and to gain the most benefits from CE it is

put in a wider context. This is called Collaborative Engineering. Collaborative Engineer-

ing will be the management and engineering philosophy for the future. Wrong imple-

mentation can be avoided by managing the changes that derive from implementing CE.

Besides an increasing change towards Collaborative Engineering another develop-ment will change management practice in the near future. This development is called

Networking. Surviving for companies means good relations, networks with all relevant

parties. These networks can also lead to agile manufacturing.

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