Lean Value Creation in the Product Development Process With the Principle of Set Based Concurrent Engineering

Lean value creation requires a value-adding network of lean activities across the whole Product Development Process (PDP). Management needs to allocate resources and properly control the process to create the value that stakeholders desire. Leading companies in industry have successfully applied Set-Based Concurrent Engineering (SBCE) for lean PDP. In SBCE, designers propose several feasible solutions and develop them relatively independently and in parallel, and then gradually narrow the sets of solutions based on updated project feedback at each stage-gate design review. As an important lean concept with many advantages, SBCE has constraints that can jeopardize lean value creation. For instance, it is unclear how resources are allocated to each stage, different functional teams, and different value creation activities related to different kinds of value, which can cause waste of talent, time, and money. This paper focuses on how resources can be allocated to SBCE by viewing product development activities as value creation cells. Under management control, lean value creation activities use knowledge and other resources to produce valuable design solutions. A mathematical feedback control model is proposed to illustrate how management can invest resources for the value creation process. This model can be used to explore resource allocation to functional teams and processes according to a holistic value creation project development strategy and the optimal creation of lean value.