1. TTMG 5001 Principles of Management for Engineers Session 4: Oct 5 Fall 2011
Michael Weiss

2. Session 4 objectives
Upon completion of the session, you will know about
the recent literature in design management
how to improve schedule and cost through (i) overlapping and information sharing; (ii) appropriate modularization of design; and (iii) opening up the innovation process to users
rationale required to (i) develop hypotheses, (ii) design simulations and experiments, and (iii) design questionnaires
and you will be able to
identify the objectives, deliverables, contribution and relevance of management of design research
generate lessons learned and identify important topics that are missing
identify research opportunities that are relevant and make contributions

3. Agenda Questions about Professor’s summary of assigned readings
Two TTMG 5001 assignments
Gate 0
Professor’s summary of assigned readings
Questions to which we want answers and comments

4. 1. Questions TTMG 5001 Assignments Gate 0 Literature review Gate 0
Objectives
Deliverables
Relevance
Contributions
Theoretical basis (thesis)
Method
Data acquisition
Data analysis
References

5. 2. Summary Session 4 assigned articles Objectives
Deliverables, contribution and relevance
Lessons learned
Research opportunities

6. Session 4 assigned articles
Bhuiyan, N., Gerwin, D., & Thomson, V Simulation of the new product development process for performance improvement. Management Science, 50(12):
Ethiraj, S.K., & Levinthal, D Modularity and innovation in complex systems. Management Science, 50(2):
MacCormack, A., Rusnak, J., & Baldwin, C., Exploring the Structure of Complex Software Designs: An Empirical Study of Open Source and Proprietary Code. Management Science, 52(7):
Prügl, R., & Schreier, M Learning from leading-edge customers at The Sims: Opening up the innovation process using toolkits. R&D Management, 36(3):

7. Objectives
Examines how opening innovation processes to customers encourages user innovation and sharing of innovations among customers
Prügl & Schreier (2006)
Examine how the architecture of a software product is affected by its development environment, and how architectural change is the result of managerial choice
Examines how under- and over- modularity affect design performance
Examines how functional interaction and overlapping activities affect development time and person-days effort under low and high uncertainty
MacCormack et al. (2006)
Ethiraj & Levinthal (2004)
Bhuiyan et al. (2004)

8. Deliverables Quantitative analysis
Results of a survey of innovative users of one game
Prügl & Schreier (2006)
Results of two case studies that model the evolution of two software products (proprietary and open source)
Model
Results of simulations that modeled the interaction of 10 and 100 firms
Results of simulations built using data for 6 projects undertaken at one mid-size PCB manufacturer over two years prior to 2001
MacCormack et al. (2006)
Ethiraj & Levinthal (2004)
Bhuiyan et al. (2004)

9. Contribution Bhuiyan et al. (2004)
Provide a representation of the development process where the dependent variables are development time and effort and the independent variables include overlapping and functional interaction (previously the dependent variable was development time and the independent variable was overlapping)
Independent of uncertainty, increasing functional interaction, given any value of overlapping, initially decreases and then increases effort so that an optimal level exists, and also initially decreases development time at a faster rate
Independent of uncertainty, when phases are interdependent, increasing overlapping without functional interaction increases the effort
More overlapping when some functional interaction occurs is appropriate in low uncertainty conditions and not in high uncertainty conditions
Concurrent engineering (CE) is better under low uncertainty, and sequential engineering (SE) is better under high uncertainty
Dedicated teams are useful only under high uncertainty
Bhuiyan et al. (2004)

10. Contribution (continued)
Ethiraj & Levinthal (2004)
Provide a method to examine the appropriate modularization of complex systems (previously nothing was known about the trade-offs involved in modularization and the processes of modularization evolution)
Given an unknown underlying decomposition of the system, designers are better off erring on the side of integration rather than greater modularity
Speed and efficiency gains from modularization will, as a result of cross-module interdependencies, be offset by the increased time spent testing and integrating the system
Benefits from recombination increase in a market system where there is a greater degree of system and module variety (as compared to an internal selection environment)

11. Contribution (continued)
MacCormack et al. (2006)
Apply the technique of design structure matrices (DSMs) to the analysis of software architecture
Define new metrics (propagation cost and clustered cost) to compare design structures and track their evolution
There are substantial differences in modularity between software systems comparable in size and function
A product's design mirrors the organization that develops it: distributed development requires an architecture of participation that promotes ease of understanding and contribution by minimizing propagation costs

12. Contribution (continued)
Provide an empirical analysis that extends our knowledge of the user-as-innovator approach (previously it was thought that the main benefit of innovation toolkits was to satisfy a customer's needs in an efficient and valuable way)
Innovative users spend significant time modifying and creating game objects (attributes, shapes, new types of objects)
The needs of leading-edge users are not met by company- supplied toolkits: these users develop their own tools
There is a market for user-created objects
Prügl & Schreier (2006)

13. Relevant to researchers and students because
Prügl & Schreier (2006)
MacCormack et al. (2006)
Ethiraj & Levinthal (2004)
Bhuiyan et al. (2004)
Provide a good example of how to undertake research in a new domain
Provide examples of structure, data collection, variable measurement, and statistical techniques that can be used to conduct research that is relevant to actors in the product development domain
Provide examples of designing simulations and experiments
Provides example of designing a questionnaire
Provides example of good rationale for supporting hypotheses

14. Relevant to researchers and students because (continued)
Provide empirical analysis of the implications of open innovation
Extend our understanding of the role of user toolkits
Prügl & Schreier (2006)
MacCormack et al. (2006)
Ethiraj & Levinthal (2004)
Bhuiyan et al. (2004)
Identify product architecture as critical topic to understand
Provide a method based on DSMs for the analysis of software architecture
Illustrate cross- sectional and longitudinal comparisons
Provide a method to examine modularization in complex system and two key processes that define design evolution: local search and recombination
Provide a model to reduce development time and effort
Identify overlap and functional interaction as the key independent variables

15. Relevant to TMT & development managers because
Bhuiyan et al. (2004)
Ethiraj & Levinthal (2004)
MacCormack et al. (2006)
Prügl & Schreier (2006)
To increase performance in the complex design domain, first identify (i) uncertainty and (ii) organizational mode. Then understand how the following will affect development time and project cost: overlapping, functional interaction, module decomposition, product architecture, and openness. Finally, define work breakdown structure.
To reduce development time, you may need to increase development costs
To reduce development time you must trade off modularization with the effort required to test and integrate the system
Purposeful managerial actions can significantly impact a design's structure
To integrate innovative users into product development, you need to be a planter rather than a hunter

16. Relevant to TMT and development managers because (continued)
Bhuiyan et al. (2004)
Ethiraj & Levinthal (2004)
MacCormack et al. (2006)
Prügl & Schreier (2006)
Identifies circumstances in which concurrent engineering and sequential engineering work
Highlights the need to invest in the development of skills and tools to implement functional interaction
Suggests that benefits can be obtained from reconfiguring various open source software and Web services
Highlights the need to create an architecture of participation when releasing closed source as open
Toolkits provide valuable market research
Leading-edge users themselves are a valuable resource in the firm's innovation process

17. Lessons learned - General
When we know the perspectives and the context used to empirically validate them, we avoid doing things that add no value and we allocate resources more effectively
A variety of research approaches and topics all leading to improve performance in the product development domain exist
You can improve more than one variable at a time (e.g., time and cost)

18. Lessons learned - Bhuiyan et al. (2004)
________ affects decisions on functional interaction and overlap (i.e., when activities start and end)
Must trade off development time and ____________
Increasing overlap without __________________ increases development time and effort

19. Lessons learned - Ethiraj & Levinthal (2004)
Two key processes define the evolution of design: local ___________________________ and ________________________________

20. Lessons learned – MacCormack et al. (2006)
Product architecture mirrors ___________________
Design is a managerial choice
When releasing proprietary code as open source we need to create a __________________________

21. Lessons learned - Prügl & Schreier (2006)
Reasons for allowing “mods” include: ___________________________________
___________________________________
Toolkits might attract __________________ users to evolve into leading-edge users over time

22. 3. Questions to which we want answers
Is modularization always better than integral designs? In what instances are integral designs better?
Does modularity make a design easier to imitate? If yes, are there ways to prevent imitation?
What is the relationship between design and maintenance?
Can findings about toolkits be applied to non-digital industries?

23. Questions to which we want answers (continued)