Work Distribution in Global Product Development Organizations

1 SUMMARY Competitive pressures (aggressive cost targets), availability of exceptional and cheaper talent globally, availability of communication media for seamless information flow (aided by advances in collaborative engineering tools and internet technology), advances in IP protection, and several other factors are driving global product development. This has led many firms to replace their traditional, collocated product development processes and organizational structures with new global product development processes and organizations. In an earlier study [1], we identified the role of product architecture, process flow, and PD organization on the same. While literature abounds with prescriptions on modular and integral systems/processes [3, 4, 5], we observed that most components or processes can neither be termed completely modular or integral at the task level. In [1], we also identified the trade-off between lower cost rates and increased work and co-ordination time for globally distributed engineering activities. Here we describe an approach towards structuring work distribution for product development organizations that are distributed globally and are neither modular nor integral, but in-between or complex. We use DSM models to capture both the product development process and the organizational structure. We formulate an optimization model to determine the most effective way to assign the process activities to the distributed work locations.