There was a time not long ago when design teams for products ranging from computer hardware to aircraft carriers were housed within the same four walls of a company. Within the last decade or so, firms began moving away from a centralized design approach to innovation in favor of specialized strategic partners — oftentimes scattered in different locations across the globe.
But with the shift away from centralized design to what is known as the distributed innovation model, what challenges do companies face in the product-design process?
That was the question posed by TDAI affiliate Aravind Chandrasekaran, associate professor of operations in Fisher College of Business’s Department of Management Sciences, and colleagues Professor Edward G. Anderson Jr., of the University of Texas McCombs School of Business; Professor Alison Davis-Blake, of the University of Michigan’s Ross School of Business; and Geoffrey G. Parker, of Tulane University’s Freeman School of Business.
The researchers’ findings appear in the journal Information Systems Research in a new paper titled Managing Distributed Product Development Projects: Integration Strategies for Time Zone and Language Barriers.
The shift to distributed project teams began in the software development field, but it quickly spread to other industries, including a wide range of physical product manufacturers. To achieve design efficiencies and cost savings, today’s companies often seek out strategic partners with the expertise they need, which typically means working with partners on the other side of the world from various cultures who speak different languages.
The researchers examined some of the challenges inherent among these distributed teams. The main obstacles they discovered were time zone differences, which typically lead to delays in email response times, and language differences, especially with non-native English speakers understanding jargon-heavy engineering concepts.
“We wanted to study what can be done to minimize these barriers within the design process,” Chandrasekaran said.
The research team studied 20 multinational firms that span a variety of industries including aerospace, IT, medical device, commercial goods and food processing. The researchers analyzed some of the tactics these firms employed to overcome the challenges inherent with distributed innovation.
Some common methods firms use include co-locating workers, whereby members from strategic partner teams spend time with teams from the focal company; modularization of product design, which involves producing components in modules and then bringing the respective parts together later for assembly; and IT solutions, such as video conferencing. The researchers’ findings validate what many managers have discovered, which is that these solutions often do little to minimize the challenges of distributed product development.
What does work?
Two tactics stood out to the researchers. First, they found that firms using standardized design-specific IT systems have greater success in their product development projects. For example, firms that use a design structure matrix process to capture the interactions between distributed development teams fared better than those that did not.
The second, often more successful strategy was having a designated person or an entity within the organization serve as the single point of contact between two geographically separated teams. Known as a supply chain integrator, this entity serves as a pivot point between the two locations, even if there are multiple teams within each country. This strategy minimized coordination challenges, the researchers found.
With funding from the National Science Foundation, the team interviewed supply chain integrators and discovered common traits, including an understanding of cause and effect, an ability to coordinate the work, systems thinking ability, and bilingual or multilingual skills.
“They do more than span the geographical boundaries; they have a macro or systems view of the world,” Chandrasekaran said. “They understand that if they’re making a small change to one aspect of the project, they know how that change will affect other teams. That skill of helping people coordinate the work was very unique to these individuals.”
However, the researchers are quick to acknowledge that there is no silver bullet for overcoming the challenges of distributed projects, noting that firms must anticipate the tradeoffs when using distributed product development.
Citing previous research by Professor Kim Clark, former dean of Harvard Business School, Chandrasekaran said his team’s research also found that “heavy weight project managers” have an edge in distributed workforces because they tend to have access to high levels of their organizations’ management and can use that access to resolve issues efficiently.
For firms considering the use of supply chain integrators, Chandrasekaran notes some things to consider. Supply chain integrators are typically employed by the product manufacturing companies, rather than being third parties. In addition to systems knowledge, they often have design and procedural knowledge, as well as an understanding of procurement.
Most importantly, the researchers found that supply chain integrators need to understand that when they’re working with their counterparts, it’s not just that they’re working on a particular aspect of the project, they have to understand how that project actually affects the bigger picture.
“If your firm works on distributed projects, you’re bound to have a lot of coordination issues,” Chandrasekaran said. “The common mechanisms that managers might already be employing may not be effective. Firms will likely have to invest in people with these types of specialized supply chain skills.”