Is specialization the most effective solution to overload? : a system dynamics exploration of a product development organization

Abstract

This work investigates the overload problems of one product development department in a consumer products company. Many in the organization attribute the problem to an external source - a burgeoning product portfolio. The most common solution posed is to split the department into two in order to reap the productivity gains of specialization and reduce the overload. It is proposed that some of the overload is internally generated and specialization alone will not be enough. There is a Reinventing the Wheel phenomenon that occurs when projects are handed off from one person to another. Additional work is generated with each hand off. This problem can be exacerbated by high turnover, lack of documentation, switch loss, or delays in project completion. System dynamics models were created to explore the feedback loops, delayed effects of managerial decisions and resulting behavior of the system. Results showed that specialization leads to initially high productivity, but the gains decrease over time as breadth of experience across the organization decays and rework and coordination costs increase. It is also shown that overload could be internally generated through managerial policies. If these policies are not changed, specializing may not be as effective. Recommendations include considering turnover as part of project planning and carefully monitoring workload so that the productivity does not plummet and affect all programs. Specialization is a good solution in some cases, but is not the best solution for work that requires a great deal of interaction between functions, where the level of coordination required to share knowledge outweighs the productivity gains.