This section looks at the importance of the product and the challenges it faces in a competitive market and hence the motivation behind applying concurrent engineering techniques. For this section will shall work from the premise put forward in Eliyahu M. Goldratt's seminal book 'The Goal'. He states that the true goal of a manufacturing organisation is to make money, and that when considering the organisation, it should be considered as a whole, not just its part elements.
Before a product, from a stereo system to a piece of office equipment can be bought from a showroom or catalogue, a large amount of time, effort and money will have gone into that product's research, design and manufacture to bring that product to the market-place. The two processes illustrated in this submission are ways of getting the product concept to its goal, remembering that it is a sale of the product which will bring money into the business.
Many industrial writers recognise that one of the most important factors which affects how much a product will sell is the timing of its launch into the market place - especially if the market is a high technology one.
"McKinsey and Co., a management consulting firm, developed an economic model showing that high-tech products that come to market six months late, but on budget, earn 33% less profit over five years. However, products that come out on time and as much as 50% over budget reduce profits by up to only 4%."
[Gillen & Fitz 1]
If these figures (which are of course subjective coming from an involved party) are even in the vicinity of the truth, then the importance of getting to market quickly, whilst adhering to quality goals, satisfying requirements etc., must be of key importance. Part of the reason for this impetus comes from the fact that in the high-technology areas we are discussing, the life cycles of products is getting shorter which in turn in many cases is due to better development practices. Examples abound with a quite visible one being the increasing rat-race in the PC arena (of the IBM compatible type). This is driven to a large extent by Intel, which is now employing more concurrent engineering philosophies in its chip development with the result that it can now release a new chip to run 80x86 code every two years instead of the four both the 80386 and i486 processors took, beginning with the Pentium and continuing with the P6 Pentium Pro, released in mid 1995. To balance this, and to illustrate that this speed must be balanced - a good product that satisfies needs must still be produced - it should be remembered that the first Pentium chips, the version one P60's had a double floating point division error which not only cost Intel a large amount of money in replacement chips, but also did untold damage to the manufacturer's reputation and their customer relations (initially they told some users to just put up with it).
These projects may be of any size, from a low part count cost-down redesign - as looked during the research for this submission, to a project such as Boeing's 3 million part 777 project. The ability to manage projects such as these has in the past, for many companies, been a route to failure, waste, and missed opportunities which was often a reflection upon the structure and culture employed - rather than due to a lack technical expertise available and used through the project. The scale of the task facing organisations is briefly described by Biren Prasad et al.
"The development of products in large industrial organisations involves numerous engineers from different disciplines working on interdependent components. Objectives are sometimes in conflict. The need for overall co-ordination, consistency, control and integrity of data, design ideas and design rationale is critical. The information generated by each designer must be viewed in the context of the information generated by other designers, the enterprise historical data and the organisation as a whole."
It should be remembered that many organisations are still using the older technique of product development - the 'over-the-wall' approach. This is very much a traditional way of doing things in the Taylorist functional West, with operations through the development of the product being performed sequentially with little feedback.
The problems which arise from this range from sheer slow progress to the amplifying internal divisions within the organisation thus resulting in wasting of valuable time and resources. On a more global and cultural slant, a comparison of average lead times between the more traditional European companies and more concurrent biased Japanese competitors mirrors Japanese companies' domination of many traditionally European markets today. For 12 projects, Japanese companies averaged 43 months from concept to market, compared to a European average of 63 months - that's over a year-and-a-half more development time [Design 1]. The effect of that in the market place is obvious - lost sales and increased cost.