Exchanging Preliminary Information in Concurrent Engineering: Alternative Coordination Strategies

• Authors: Christian Terwiesch;Christoph H. Loch;Arnoud De Meyer
• Venue: Organization Science
• Year: 2002

Successful application of concurrent development processes (concurrent engineering) requires tight coordination. To speed development, tasks often proceed in parallel by relying on preliminary information from other tasks, information that has not yet been finalized. This frequently causes substantial rework using as much as 50% of total engineering capacity. Previous studies have either described coordination as a complex social process, or have focused on the frequency, but not the content, of information exchanges. Through extensive fieldwork in a high-end German automotive manufacturer, we develop a framework of preliminary information that distinguishes information precision and information stability. Information precision refers to the accuracy of the information exchanged. Information stability defines the likelihood of changing a piece of information later in the process.This definition of preliminary information allows us to develop a time-dependent model for managing interdependent tasks, producing two alternative strategies: iterative and set-based coordination. We discuss the trade-offs in choosing a coordination strategy and how they change over time. This allows an organization to match its problem-solving strategy with the interdependence it faces. Set-based coordination requires an absence of ambiguity, and should be emphasized if either starvation costs or the cost of pursuing multiple design alternatives in parallel are low. Iterative coordination should be emphasized if the downstream task faces ambiguity, or if starvation costs are high and iteration (rework) costs are low.