Abstract
This paper uses system dynamics (SD) approach to model the lean product development strategy of set-based design (SBD) and the traditional product development strategy of point-based design (PBD). Using the Vensim System Dynamics (SD) tool, the paper investigates the performance outcomes of adopting the strategies within a new product development (NPD) context. The model simulates the development of five hypothetical projects. The model uses a classical SD project view as a rework cycle. It includes elements of both PBD and SBD which can be switched on/off to assess their impact on performance. Multiple projects are modeled so that the knowledge reuse issues are explored for differentiating PBD and SBD. In particular, we address the question of “what are the effects of frontloading in SBD on project durations, total project costs, and return on investment (ROI)?” From initial simulation results, it is found that in a typical PD, SBD can bring up to 25% reduction in average project durations, 40% reduction in total project costs and improves ROI significantly.
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