The estimation of product-development project delay caused by imperfect communication in outsourcing
Editor: Udo Lindemann, Srinivasan V, Yong Se Kim, Sang Won Lee, John Clarkson, Gaetano Cascini
Author: Oh, Gyesik; Hong, Yoo S.
Institution: Seoul National University, Korea, Republic of (South Korea)
As competition in the market becomes fierce, companies are required to develop a new product within short duration. One of methods to accelerate the product development is concurrent engineering which allows overlapping interdependent development activities. However, the constraint of development capacity limits the number of development activities concurrently executed. In order to overcome the development resource limitation, companies outsource some of development activities. Due to culture and language differences and low media richness of communication channels, communication between the company and the outsourcing provider takes more time than that between in-house development teams. The different combinations of outsourcing activities result in different project duration since overall communication delay varies with the choice of outsourcing activities under complex product development architecture. We estimate the project duration in consideration of communication delay on overall project duration under concurrent engineering by simulating the product development process. The paper may help product development managers to estimate the project prolongation in outsourcing.