Decision making in product development

Are you outside-in or inside-out?

Gary J. Summers, Christopher M Scherpereel

Research output: Contribution to journalArticle

39 Citations (Scopus)

Abstract

Purpose - This paper proposes a relationship between decision making and key qualities of business systems. Design/methodology/approach - The authors explore the relationship between decision making and systems by contrasting the decision making in two well-known systems: MRP and JIT. The two systems present two sets of opposing qualities. By considering the relationship between a decision and its environment, we propose that these sets of qualities are not unique to MRP and JIT. They arise from two general approaches to decision making. Having introduced the two approaches, we analyze three product development systems: Stage-Gate, Agile and Lean. Findings - In manufacturing, MRP is a push system; JIT is a pull system. MRP seeks perfection; JIT seeks consistency. MRP gives decision makers great discretion; JIT constrains decisions. These opposing qualities, and others, arise from two general approaches to decision making: outside-in and inside-out. As the difficulty of decisions increase, relative to a decision maker's ability, the cost of mistakes becomes significant. In these situations, the inside-out approach should outperform the outside-in approach. The inside-out approach constrains decision making to limit the cost of errors. The outside-in approach embraces complexity, exposing itself to more decision errors. In product development, the Lean and Agile systems exploit the inside-out approach. They constrain decisions and reduce the cost of errors that arise from two sources. Lean addresses interactions, which add complexity to business systems. Agile addresses unpredictability, which adds uncertainty to business systems. Originality/value - The relationships the authors propose show how decision making affects the development, control and performance of business systems.

Original languageEnglish (US)
Pages (from-to)1299-1312
Number of pages14
JournalManagement Decision
Volume46
Issue number9
DOIs
StatePublished - 2008

Fingerprint

Decision making
Product development
Just-in-time
Costs
Decision maker
Pull system
Design methodology
Uncertainty
Discretion
Manufacturing
Interaction

Keywords

  • Agile production
  • Decision making
  • Just in time
  • Lean production
  • Manufacturing resource planning
  • Product development

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Management Science and Operations Research

Cite this

Decision making in product development : Are you outside-in or inside-out? / Summers, Gary J.; Scherpereel, Christopher M.

In: Management Decision, Vol. 46, No. 9, 2008, p. 1299-1312.

Research output: Contribution to journalArticle

@article{95f7554b1b704afa8e9e13d70c89117b,
title = "Decision making in product development: Are you outside-in or inside-out?",
abstract = "Purpose - This paper proposes a relationship between decision making and key qualities of business systems. Design/methodology/approach - The authors explore the relationship between decision making and systems by contrasting the decision making in two well-known systems: MRP and JIT. The two systems present two sets of opposing qualities. By considering the relationship between a decision and its environment, we propose that these sets of qualities are not unique to MRP and JIT. They arise from two general approaches to decision making. Having introduced the two approaches, we analyze three product development systems: Stage-Gate, Agile and Lean. Findings - In manufacturing, MRP is a push system; JIT is a pull system. MRP seeks perfection; JIT seeks consistency. MRP gives decision makers great discretion; JIT constrains decisions. These opposing qualities, and others, arise from two general approaches to decision making: outside-in and inside-out. As the difficulty of decisions increase, relative to a decision maker's ability, the cost of mistakes becomes significant. In these situations, the inside-out approach should outperform the outside-in approach. The inside-out approach constrains decision making to limit the cost of errors. The outside-in approach embraces complexity, exposing itself to more decision errors. In product development, the Lean and Agile systems exploit the inside-out approach. They constrain decisions and reduce the cost of errors that arise from two sources. Lean addresses interactions, which add complexity to business systems. Agile addresses unpredictability, which adds uncertainty to business systems. Originality/value - The relationships the authors propose show how decision making affects the development, control and performance of business systems.",
keywords = "Agile production, Decision making, Just in time, Lean production, Manufacturing resource planning, Product development",
author = "Summers, {Gary J.} and Scherpereel, {Christopher M}",
year = "2008",
doi = "10.1108/00251740810911957",
language = "English (US)",
volume = "46",
pages = "1299--1312",
journal = "Management Decision",
issn = "0025-1747",
publisher = "Emerald Group Publishing Ltd.",
number = "9",

}

TY - JOUR

T1 - Decision making in product development

T2 - Are you outside-in or inside-out?

AU - Summers, Gary J.

AU - Scherpereel, Christopher M

PY - 2008

Y1 - 2008

N2 - Purpose - This paper proposes a relationship between decision making and key qualities of business systems. Design/methodology/approach - The authors explore the relationship between decision making and systems by contrasting the decision making in two well-known systems: MRP and JIT. The two systems present two sets of opposing qualities. By considering the relationship between a decision and its environment, we propose that these sets of qualities are not unique to MRP and JIT. They arise from two general approaches to decision making. Having introduced the two approaches, we analyze three product development systems: Stage-Gate, Agile and Lean. Findings - In manufacturing, MRP is a push system; JIT is a pull system. MRP seeks perfection; JIT seeks consistency. MRP gives decision makers great discretion; JIT constrains decisions. These opposing qualities, and others, arise from two general approaches to decision making: outside-in and inside-out. As the difficulty of decisions increase, relative to a decision maker's ability, the cost of mistakes becomes significant. In these situations, the inside-out approach should outperform the outside-in approach. The inside-out approach constrains decision making to limit the cost of errors. The outside-in approach embraces complexity, exposing itself to more decision errors. In product development, the Lean and Agile systems exploit the inside-out approach. They constrain decisions and reduce the cost of errors that arise from two sources. Lean addresses interactions, which add complexity to business systems. Agile addresses unpredictability, which adds uncertainty to business systems. Originality/value - The relationships the authors propose show how decision making affects the development, control and performance of business systems.

AB - Purpose - This paper proposes a relationship between decision making and key qualities of business systems. Design/methodology/approach - The authors explore the relationship between decision making and systems by contrasting the decision making in two well-known systems: MRP and JIT. The two systems present two sets of opposing qualities. By considering the relationship between a decision and its environment, we propose that these sets of qualities are not unique to MRP and JIT. They arise from two general approaches to decision making. Having introduced the two approaches, we analyze three product development systems: Stage-Gate, Agile and Lean. Findings - In manufacturing, MRP is a push system; JIT is a pull system. MRP seeks perfection; JIT seeks consistency. MRP gives decision makers great discretion; JIT constrains decisions. These opposing qualities, and others, arise from two general approaches to decision making: outside-in and inside-out. As the difficulty of decisions increase, relative to a decision maker's ability, the cost of mistakes becomes significant. In these situations, the inside-out approach should outperform the outside-in approach. The inside-out approach constrains decision making to limit the cost of errors. The outside-in approach embraces complexity, exposing itself to more decision errors. In product development, the Lean and Agile systems exploit the inside-out approach. They constrain decisions and reduce the cost of errors that arise from two sources. Lean addresses interactions, which add complexity to business systems. Agile addresses unpredictability, which adds uncertainty to business systems. Originality/value - The relationships the authors propose show how decision making affects the development, control and performance of business systems.

KW - Agile production

KW - Decision making

KW - Just in time

KW - Lean production

KW - Manufacturing resource planning

KW - Product development

UR - http://www.scopus.com/inward/record.url?scp=54949145811&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=54949145811&partnerID=8YFLogxK

U2 - 10.1108/00251740810911957

DO - 10.1108/00251740810911957

M3 - Article

VL - 46

SP - 1299

EP - 1312

JO - Management Decision

JF - Management Decision

SN - 0025-1747

IS - 9

ER -