Staying nimble : a flexible approach to complex product development in a rigid environment

Abstract

Incorporating flexibility into business processes can provide organizations with increased agility to respond to uncertainty within complex product development projects spanning across many years and many organizations. Current methods used for determining value in order to justify associated costs for implementing and maintaining process flexibility are not sufficient in capturing the full worth of flexibilities within processes. A framework is developed which builds upon on prior research to assess value of flexibility within product development processes, combining benefits of rigid constraints with flexible options. Valuation of a simple potential flexibility within an aircraft development project is used to demonstrate the use of the framework in practice and to evaluate strengths and weaknesses of the framework. The method of valuation provides benefit of capturing hidden value that would otherwise be ignored or left on the table and provides further insight into the behavior of the process flexibility in a manner which leads to optimization of that flexibility. However, adoption of the framework is hindered by the skillset required in practice along with the inherent inability to demonstrate its full value, as measured by actual performance.