An overlapping-based process model for managing schedule and cost risk in product development

Abstract

Overlapping between development activities stemming from concurrent engineering may not only reduce duration of a project but also create rework risk. This article presents a process modeling and analysis technique for managing complex product development projects using optimization and simulation techniques. In order to analyze the forced overlapped process with lead–risk, we propose evolution and sensitivity design structure matrix for reflecting overlapping and their impact on the degree of activity sensitivity and evolution in the process model. Using the design structure matrix, we present the schedule and cost model associated with iteration, overlapping, and rework by incorporating many more general characteristics of complex design processes. The model can be used for better project planning and control by identifying overlapping and risk for process improvements, and for evaluating alternative planning and execution strategies. An industrial example, a tactics aerocraft preliminary development design process at a company, is provided to illustrate the utility of the model using optimization and discrete-event simulation. The optimization model maximizes the compressed time associated with overlapping and yields several managerial insights, including optimization analysis of project activity sequence, how overlapping and rework risk impact on project schedule and cost, trading off schedule and cost risk.