EFFECTS OF CONCURRENT ENGINEERING ON MAKE-TO-ORDER PRODUCTS

An increasing number of manufacturing organizations are using concurrent engineering product development processes, which rely on parallel scheduling of activities throughout the product development cycle. This study examines the impact of such practices on product development time, product quality, and delivery leadtime. Using data obtained from structured interviews with product managers and engineers, six hypotheses are tested using a sample of 31 make-to-order (MTO) products from several industries. The results suggest that concurrent engineering may be appropriate for incremental innovation, but may have some ''hidden costs'' in the form of increased defects when applied to new ''breakthrough'' innovations. However, this strategy may be entirely suited to a specific customer segment that is willing to work with the manufacturer on debugging the product in the field. The study points out the importance of considering the hidden costs of concurrent engineering, and discusses the strategic implications of such decisions for technology managers.