NREC: Risk Assessment and Planning of Complex Designs

Estimating the nonrecurring engineering (NRE) design cost constitutes an essential part of the investment-risk assessment and planning phases of new product development. A product's NRE design cost is the number of staff-months required to successfully complete its design. This information is essential in determining the human resources needed to meet a project's time-to-market constraints. For low-complexity development processes that target relatively stable products, relying on experienced managers to produce NRE design cost estimates is reasonable. But microprocessor design and other leading-edge product development processes often involve hundreds of designers, perhaps located at geographically distinct sites, and consist of a formidable number of tasks. These processes require a more systematic way of generating NRE design cost estimates. To that end, the authors have developed an NRE design cost estimation model and implemented it in a tool called NREC. NREC assists managers in making a fine-grained estimate of a project's NRE design costs, from requirements to final layout, as well as in tracking and assessing costs of completed projects. The tool also enables managers to systematically validate and tune the cost model's parameters according to the particular history of a project's design environment.