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SEMS Says

The uncomfortable side of new product development

Organizations use new product development (NPD) projects to respond to rapid changes in global competition, technology advancements and customer needs. Project management can be pivotal to these plans. Unfortunately, traditional project management has proven insufficient to handle uncertainty and complexity, the fundamental, but often uncomfortable, side of NPD projects. But how can we plan if we do not know exactly what the project involves?

Novel NPD projects pose unique levels of uncertainty and complexity. Uncertainty unveils our knowledge gaps in terms of foreseeable (variation and iteration loops) and unforeseeable (unknown unknowns) events, while complexity (total number of project pieces and interactions among them) hinders our ability to understand and predict project kinetics. Knowledge gaps result from unknown influence factors, ill-understood factor interactions, or both. In any event, project complexity prevents us from designing “optimal” plans, while project uncertainty fictionalizes them.

Accordingly, instead of devising contingency actions for plan adherence, implement improvised actions to increase plan flexibility and allow adjustments as unknown unknowns are revealed. Improvisation forces spontaneous and creative responses to unknown events, although this can become uncomfortable as deadlines near. Plus, improvisation demands more sophisticated project management, as it takes the form of systematic iteration cycles of experimentation and parallel exploration strategies, such as Toyota’s set-based design, to gain new information and create learning.

It is imperative to identify a project’s uncertainty and complexity profiles. For example, concurrent engineering seems more appropriate for highly complex projects, while set-based concurrent engineering and iteration-and-learn approaches cope well with project uncertainties. Overall, effective NPD planning demands that you expand the toolbox for planning in unknown and dynamic terrains. Some project management toolkit extensions include techniques for diagnosing knowledge gaps, decomposing complexity into manageable chunks, managing improvisation (iteration and concurrency), managing team learning and managing project plan adjustments.

Innovative NPD projects are less likely to be copied than ordinary ones, making them more likely to yield sustainable profits. The challenge is to pick the right combination of project management approaches and techniques that guarantee success.

Cecilia Martínez received the best paper award for the IERC 2011 Engineering Management Track. She holds a D.Sc. in industrial engineering from Monterrey Tech and a Ph.D. in systems and engineering management from Texas Tech University.

Sustainability: Make a difference and challenge the system

What do you think of when you hear the term sustainability? Some associate it with environmentalism and regulations. Others think of it as another buzzword or management fad. Hopefully, many recognize it as the “right thing to do.”

In its most basic form, sustainability can be compared to a typical input-output transformation model. On the input side, good business dictates that we use our resources efficiently. On the output side, good business requires that we maximize the value of our outputs. Therefore, sustainability implies applying a systems perspective for using resources efficiently and minimizing waste – sound business practices.

Consider construction. Suppose innovative technologies (low emissions, solar-control coatings on windows, improved lighting energy efficiency) would add 5 percent to the cost of the new building. This might hinder project approval. But what if we show decreases in total initial capital costs and annual operating and maintenance costs? Systems thinking could reduce the size of the heating, ventilation and air conditioning systems. And we benefit from reduced energy usage for years. We show the aggregate effect of innovative technology by considering each system component in terms of interoperability and compatibility. We ask what level of resource consumption occurs during system use? What type of maintenance is involved? What are the disposal costs? All these relate to sustainability and prompt us to develop a long-term versus short-term perspective when making decisions.

This brings up a number of thoughts. For instance, we may not think individual efforts make much difference. But ponder this quote often attributed to Edmund Burke, a member of the British Parliament from 1774 to 1780: “Nobody made a greater mistake than he who did nothing because he could only do a little.” All sustainability efforts are important because they provide an example for others and help develop a sustainability culture.

In addition, often we accept the status quo and don’t want to “challenge” the system. However, leaders and the rank and file must develop the will to ask the tough questions and ensure we’re using a systems approach with a long-term perspective. This means incorporating sustainability into a coherent strategy. As Abraham Lincoln once said, “You can’t escape the responsibility of tomorrow by evading it today.”

Alfred E. Thal Jr. is an associate professor of engineering management at the Air Force Institute of Technology (AFIT). He received his Ph.D. in environmental engineering from the University of Oklahoma. He also holds an M.S. in engineering management from AFIT and a B.S. in civil engineering from Texas Tech University.

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