Testing components, prototypes and products comprise essential, but time consuming activities throughout the product development process particularly for complex iteratively designed products. To reduce product development time, testing and design processes are often overlapped. A key research question is how this overlapping can be planned and managed to minimise risks and costs. The first part of this research study investigates how a case study company plans testing and design processes and how they manage these overlaps. The second part of the study proposes a significant modification to the existing process configuration for design and testing, which explicitly identifies virtual testing, that is an extension to Computer Aided Engineering which mirrors the testing process through product modelling and simulation, as a distinct and significant activity used to (a) enhance and (b) replace some physical tests. The analysis shows how virtual testing can mediate information flows between overlapping (re)design and physical tests. The effects of virtual testing to support overlap of test and (re)design is analysed for the development phases of diesel engine design at a case study company. We assess the costs and risks of overlaps and their amelioration through targeted virtual testing. Finally, using the analysis of the complex interactions between (re)design, physical and virtual testing, and the scope for replacing physical with virtual testing is examined.

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