System of systems thinking in product development: A system dynamic approach

Companies ceaselessly strive to have a systemic approach to survive. One of those approaches is system of system engineering (SoSE) that enables the decision-makers to understand the interaction of different systems in terms of costs, lead time, and quality. This paper considers product development (PD) in light of SoSE. Different PD stages treated as a system and analyzed to see the effects of concurrent engineering on total cost and lead time. We also analyze the marketing strategy with its components to have sound decision based on SoSE. We use a system dynamics approach and the study found that, the more cost allocated in early stage, the more reduced the total cost (by half) and the lead time reduced by a quarter. From marketing system analysis with interdependent variables, firms can control to a certain level. Some variables could be unpredictable and difficult to control as the system grows more complex.

1 Introduction

Companies want to sell their products as fast as possible to have a bigger market share. But, time-to-market is not an easy task with several complicated systems, processes and activities especially in high technology industries that require a huge amount of investment (for example power plant and aerospace industries). Decisions that are made at early design stage during product development have some quantifiable impacts of direct and indirect product development related activities and costs. This is also extended to the project time and cost overrun problem that mainly due to design changes (S. Chritamara et. al, 2002)