Research Policy 26 1998.

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Towards knowledge-based product development: the 3-D CAD model of knowledge creation
Yasunori Baba
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, Kentaro Nobeoka

Research into Artifacts, Center for Engineering (RACE), The Uniersity of Tokyo, Tokyo, Japan Research Institute for Economics and Business Administration, Kobe Uniersity, Kobe, Japan Received 17 March 1997; revised 2 September 1997; accepted 11 September 1997

Abstract This paper argues that new 3-D CAD systems can play a central role in the creation of knowledge-based product development systems. Based on a model of product development and knowledge creation which incorporates 3-D CAD technology, the paper argues that information technologies can contribute not only to efficiency improvements but also to improved hypothesis creation capabilities in engineers and organizations through technical features such as full visualization, digital pre-assembly and simulation. This paper also discusses the factors that hinder the effective introduction of 3-D CAD technology as well as the potential management and organizational requirements for successful adaptation. Firms need to have both long-term and system-level perspectives and they need engineers who have a broader set of integrated skills that were previously scattered over multiple functions. q 1998 Elsevier Science B.V.
Keywords: Knowledge; CAD; Product development; Concurrent engineering; Japanese firms

1. Introduction Many firms are currently competing in markets where a large number of product variations must be developed while lead time and development costs must be reduced. In this situation, new CADrCAMrCAE technologies coupled with the standardization of data formats have begun to make possible the concurrent development of products on digital networks. Armed with technical features such as full visualization and digital pre-assembly of com-

) Corresponding author. 4-6-1 Komaba, Meguro-ku, Tokyo 153-8904, Japan. Tel.: q81-3-5453-5887; fax: q81-3-3467-0648; e-mail: baba@race.u-tokyo.ac.jp.

ponents and simulation capability, an information technology IT.-supported development environment improves coordination and communication among engineers through integrated 3-dimensional databases and networked information exchange. The effective utilization of ITs in product development is part of a larger trend in which Japanese human-oriented approaches are being integrated with Western systemic-rationality-oriented practices. The core of Japanese competitiveness has been attributed to continuous improvements made by multi-skilled workers who have utilized their shopfloor experiences, to extensive interactions among different groups of engineers and workers, as well as to the effective introduction of microelectronics technology in the manufacturing site. Knowledge and

0048-7333r98r$19.00 q 1998 Elsevier Science B.V. All rights reserved. PII S 0 0 4 8 - 7 3 3 3 9 7 . 0 0 0 4 0 - 1

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skills are improved through an accumulation of experiences gained through direct contacts with products and through active inter-personal interactions. This human-oriented approach has enabled Japanese firms to flexibly interpret and apply technologies to varying work environments. Implementation of concurrent engineering has been based on smooth information exchange between design engineers and manufacturing engineers. In this human-oriented approach, computers were introduced only as a supportive tool. However, changes are taking place in both information technologies and in the economic environment which are affecting the competitiveness of Japanese firms. The first notable changes are rises in the standard of computer capabilities, in particular, the possibilities offered by distributed computer networks crossing national boundaries. From an economic standpoint, the entry into the world market by newly industrializing countries such as Eastern Europe, China and other Asian countries where labor costs are much lower than in Japan is forcing Japanese firms to further increase their productivity. In addition, because of intensifying global competition, standards of competition with respect to speed and efficiency of product development have been raised to unprecedented levels. In the Western systemic-rationality oriented model, on the other hand, development and production processes are integrated through the intensive use of information technologies. The process seems to reflect the Western model of problem solving which is based on pragmatism and an intellectual tradition of analytic rationality Hartshorne and Weiss, 1978; Rorty, 1982; Simon, 1996.. In this model, possible options are analyzed using clearly defined objectives and decision-making becomes a rational process that follows comparison and review of these options. The state-of-the-art of this systemic-rationality-oriented model is the management of processes in a decentralized computer environment that utilizes digital information. Theoretically, this approach enables the establishment of a global production system, in which real-time integration of the worldwide development and production activities can be achieved. As a consequence of a number of technical and organizational shortcomings, the potential of infor-

mation technologies has not been fully realized in the creation of a worldwide development and production system. However, as this paper illustrates, technical and managerial changes are taking place that will enable the creation of such a system. First, part of the technical limitations that prevented effective support of the Western model are being overcome through new generations of ITs such as three dimensional computer aided design 3-D CAD.. Second, the simplification of organizations and the delegation of managerial authority are being driven by the need for faster decision making. In the face of a knowledge-based economy, US firms appear to be the leaders in integrating US and Japanese approaches. Leading US manufacturing firms have begun to adopt aspects of the Japanese model Ellison et al., 1995; MacDuffie and Pil, 1996; Nii, 1994.. Japanese manufacturers, on the other hand, appear to be lagging behind the US firms in the systemic implementation of ITs Baba et al., 1996; Baba et al., 1995.. This paper argues that both the convergence of US and Japanese approaches and the successful improvement of new product development systems greatly depend on how fast firms introduce emerging 3-D CAD systems Baba and Nobeoka, 1996; Baba, 1996.. Section 2 reviews the evolution of CAD technologies and it defines key aspects of the new generation of 3-D CAD systems. Section 3 describes two types of conceptual models for product development, one supported by traditional 2-D CAD systems and the other led by the new 3-D CAD systems. Section 4 discusses potential contributions and benefits that the 3-D CAD systems may provide in product development process. A brief description of the Boeing 777 project is provided in Section 5 as a leading example of how the new generation of 3-D CAD systems can be effectively utilized. Section 6 explains the necessary managerial changes for successfully realizing the benefits of the new CAD systems in the product development process. This study is primarily based on a field study that was carried out in Japan during 1995 and 1996. We interviewed 14 managers and engineers in three shipbuilding firms, 22 in four automobile firms and 11 in two aircraft firms Baba and Nobeoka, 1996; Baba, 1996.. It is appropriate to study the implementation of CAD in these industries since they include the

Y. Baba, K. Nobeoka r Research Policy 26 (1998) 643659 Table 1 The evolution of CAD usage in product development Stage CAD system Primary purpose I. Introduction 2-Dr3-D mixture Efficiency in drawing data transfer to NC machines Support for efficiency in drawing and data usage for NC machines 19701985 II. Diffusion 2-Dr3-D mixture Diffusion and learning more efficiency and smoother data transfer Support for efficiency in drawing and data usage for NC machines 19851995 III. Integration 3-D Real concurrent engineering

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Relationship with traditional product development process Period in the case of automobile.

Fundamental change in process

1995

leading users of advanced CAD applications for mechanical products Kaplinsky, 1982.. It is also recognized that influences of CAD tools on design and organizational processes vary greatly depending on the type of products that are developed Liker et al., 1992..

2. The evolution of CAD tools for product development In order to consider the influence of CAD on product development, it becomes necessary to describe both the evolution of CAD tools and to define the specific characteristics of the newest generation of CAD tools that will enable the realization of a more effective product development process Aoki, 1996; Chiba and Nishigaki, 1996.. Table 1 summarizes three stages in this evolution and the types of CAD applications to product development. In the beginning of the first stage introduction stage., design engineers began to use CAD tools while almost simultaneously manufacturing engineers began to use NC machines and CAM tools. In this stage, design engineers used CAD tools primarily as an electronic drafting board. The use of CAD significantly improved the efficiency and preciseness of drawing, particularly when engineers were able to develop drawings based on existing ones. Manufacturing engineers were also able to reduce the number of engineering hours in the design of dies and molds by using digital design data that was received from design engineers. However, even when components were designed using early versions of 3-D CAD, manufacturing engineers needed to trans-

form the data rather extensively before an effective die and mold design could be realized. The second stage is a learning and diffusion stage. During this stage, design engineers learned to use CAD tools more efficiently and the tools continued to be adopted in greater numbers. Our field work found that the diffusion pattern of CAD terminals in a major Japanese automobile firm follows the classic S-curve see Fig. 1.. 1 There are about 3000 design engineers in total at this firm. The diffusion of CAD usage in the firms has been driven by the increased benefits of CAD tools to designers and engineers from four perspectives. First, designers and engineers have learned how to use CAD tools more effectively and efficiently. Salzman has reported that it usually takes a relatively long period of time for them to learn to make the most of CAD tools Salzman, 1989.. Second, CAD technologies continued to improve regarding user interface, speed and reliability. Third, there has been a continuous improvement in data transferability from one site of application to other sites. It has became much easier to transfer design data into NC data and much less time-consuming to create a CAE model. In addition, standard data formats have also improved the transfer of data. Fourth, because the benefits from CAD tools are greatest when designers can reuse existing drawings, the potential benefits from CAD have increased as

1 Based on our interviews with three other Japanese automobile firms, although there are minor differences in terms of timing, we can conlcude that the pattern is not unique to one firm.

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Fig. 1. Number of CAD terminals at a Japanese automobile firm.

firms have incorporated more designs into a digital library. However, in spite of these improvements, CAD tools were not regarded as an integrated product development tool during this stage. One of the major reasons for the lack of integration was attributed to the mixture of two and three dimensional CAD applications, which was determined by the different attributes of individual components within a single product. For example, among automobile components, exterior body panels began to be designed using 3-D CAD very early, primarily because they had complex curves and hence required 3-D representation. However, most other functional components such as the suspension, engine and transmission continued to be designed in 2-D. From the viewpoint of design drawing efficiency, many components do not benefit much from 3-D drawings. It takes more hours to design components using 3-D design tools at least until designers and engineers become fully accustomed to their use. More fundamentally, although the use of 3-D CAD could have provided potential benefits to other functional groups such as manufacturing and suppliers, each functional group pursued improvements in its own efficiency as opposed to improvements in system-level performance for an entire product development process. In the third stage of CAD usage integration stage., all components are designed using 3-D CAD tools which typically have 3-D solid modeling capabilities such as CATIA and IDEAS. The same 3-D CAD data are used by all of the engineering functions including styling and component designers, analytical engineers and manufacturing engineers. For example, the 3-D data that are created by design

engineers are shared and used by manufacturing engineers. In addition, all of the components are digitally pre-assembled as a finished product in the early stage of a development project before a real prototype becomes available. Finally, the integrated CAD systems incorporate a communication capability for sharing the latest digital data among individual computer terminals. Therefore, all of the engineers involved in a development project can monitor the latest design that is being worked on by their colleagues. This paper focuses on the influence of the third stage of CAD systems on product development. Whenever this paper uses the terms such as the new 3-D CAD systems, or 3-D CAD model, they refer to the third stage of CAD systems.

3. Product development, knowledge creation and the 3-D CAD model In order to discuss a model of product development and knowledge creation that includes CAD systems, it is beneficial to refer to current theories of problem solving. In solving problems, people use several types of logic and reasoning and in this paper we classify the logical forms into the following three: deduction, induction and abduction. The first two are used in most categorizations of human logic while the third one, abduction, was originally advocated by C.S. Peirce, a 19th century pragmatic philosopher Hartshorne and Weiss, 1978.. In deductive or inductive reasoning processes, there is a relatively low risk of arriving at a wrong conclusion because neither process contains a logical jump. On the other hand, in the abductive reasoning process, a person articulates a hypothesis that he or she believes provides a consistent explanation of the various observed data. The reasoning process used by Sherlock Holmes in determining the guilty party is an example of abduction Sebeok and UmikerSebeok, 1980.. A recent series of articles on engineering research on design argues that the most important aspect of knowledge creation in designing new products is an abductive reasoning process Nakajima, 1995, 1996; Yoshikawa, 1993.. For example, in the case of developing a new photo copier, although theories in

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electrostatic engineering, photoconducting material science and control engineering all provide a design engineer with knowledge for carrying out deductive reasoning, this knowledge by itself does not bring about a concrete design solution. It is also necessary for the designer to search for a design solution by articulating hypothetical design alternatives. Although these search activities partially utilize deductive and inductive reasoning, they are actually abductive reasoning processes Nakajima, 1995..

Based on this categorization, we will illustrate how computer systems support a problem solving in product development. We argue that i. the earlier 2-D CAD systems support deductive and inductive reasoning processes of product development through their analytical data processing capabilities and ii. the 3-D CAD systems when used in appropriate organizational and managerial settings have begun to partially support the abductive reasoning process of designers and engineers in addition to the deductive

Fig. 2. Computer supported knowledge creation 2-D CAD Model..

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and inductive reasoning processes. Therefore, the successful integration of computer and human systems will have a fundamentally different impact on product development than that by the introduction of earlier computer systems. 3.1. 2-D CAD model of product deelopment Abductive reasoning or capabilities for articulating proper hypotheses are attributes that are typically associated with human systems see line 1 in Fig. 2.. This abductive reasoning is acquired through learn-

ing by doing or through aesthetic perceptions nurtured by professional experiences Dosi et al., 1996; Tyre and von Hippel, 1995; von Hippel and Tyre, 1993; von Hippel, 1993.. Although abduction may occasionally lead to incorrect hypotheses, human beings can learn from mistakes. When they make mistakes, they find differences between their perceptions and realities. Based on these differences, they modify their mental and intellectual models. They continue this process until the hypothesis is deductively corroborated and objectively recognized as correct.

Fig. 3. Computer supported knowledge creation 3-D CAD Model..

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Although the above description focused on unstructured problems whose solution usually requires abductive reasoning, there are many structured problems to be solved in product development. These problems can be successfully solved mainly through deductive reasoning and sometimes through induction. Computer support is effective and useful for this type of problem solving see Line 2 in Fig. 2.. When a designer verifies the viability of a design plan, he or she can analyze a series of design parameters with the support of a database in which designing and drafting rules are encoded. The knowledge base of an expert system comprises a constellation of if-then rules. If problems can be fit within these rules, a solution can be found through reasoning that follows a tree structure of rules. When manufacturing knowledge is built into the database, it is possible for NC data that is fed into CAM equipment to replace skills embodied in a craftsman. In the 2-D CAD model of product development, there must be a pre-existing problem structure that is developed using an abductive reasoning process. Solutions are then obtained through a series of deductive and inductive reasoning processes that are supported by 2-D CAD systems. Information created in this process is stored as frozen knowledge in a computer-supported database see Line 3 in Fig. 2.. Product data are then transformed into concrete artifacts by transferring NC data into CAM equipment see Line 4 in Fig. 2.. Thus, even in the 2-D CAD model, computer support has significant benefits for product development. However, its limitations are also apparent. In the case of the expert system, unless conditions regarding problem solving meet the if-then rules, no solution can be obtained. Computer support is useful only when pre-specified routines are sufficient for problem solving. Therefore, in that strict sense, the 2-D CAD systems support the engineers design analysis processes. 3.2. 3-D CAD model of product deelopment The new 3-D CAD systems, particularly when they are embedded in the proper organizational and managerial settings, can support an engineers abductive reasoning process see Line 1 in Fig. 3.. The key

technical features of the systems are full visualization of products, simulation e.g., digital assembly. and shared data bases.pFirst, the full-visualization of products in 3-D CAD design tools enables designers and engineers to engage in more advanced hypothesis formation than with the 2-D CAD tools Adler, 1989; Robertson and Allen, 1992, 1993; Robertson et al., 1991; Young, 1987.. 3-D design enables designers and engineers to effectively create and compare designs to their design objectives Salzman, 1989.. In addition, in the 3-D design environment, all the information is expressed in a common framework so that everyone concerned with a project can quickly and flexibly respond to each other.pSecond, the new 3-D CAD systems have advantages in their ability to quickly carry out a number of iterations in the formation and verification of a hypothesis. Simulation and analysis functions built in the new 3-D CAD systems enable quicker verifications of various hypotheses than experiments with real prototypes. This process improves the outcome of product development, just as in a poker game, the probability of having a stronger hand increases by playing more games and shuffling more times. This simulation can reduce the number of design problems that might occur later in the development process. Third, shared data bases within the 3-D CAD systems support organizational knowledge creation Kogut and Zander, 1992; Niwa, 1995; Nonaka, 1994; Nonaka and Takeuchi, 1996; Nonaka et al., 1996; Nonaka and Baba, 1992; Ueda and Niwa, 1996. by facilitating interactions among designers and engineers and by improving the degree of their collaboration. For instance, sharing design ideas with other engineers enables an engineer to confirm a design from a variety of different viewpoints and to resolve design conflicts. Contents of a 3-D database contain much richer information than 2-D databases such as inter-component relationships and assembly processes see Line 2 in Fig. 3.. Further, the presentation and briefing capabilities of 3-D visualization, which are made possible using the simulation functions of 3-D CAD, increase the ability to communicate key trade-offs to other functions within the firm e.g., marketing. and outside the firm e.g., suppliers and customers.. The greatest effect on an engineers abductive reasoning process may come through a combination

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of these three technical features of 3-D CAD systems. In particular, the abductive capabilities of designers and engineers as well as of the organization may be improved through their experiences with product development in a 3-D computer-supported environment see Line 3 in Fig. 3.. Acquisition of design and engineering knowledge from what is being designed or manufactured enhances an individuals and subsequently an organizations abductive capabilities in product development Brown and Duguid, 1991; Simon, 1991; Weick, 1991.. Therefore, in the 3-D CAD model, the knowledge fields of a specific product are first created and then pieces of knowledge are constantly recombined and re-integrated through abduction see Line 4 in Fig. 3.. Consequently, the systematized knowledge can take the appearance of a group of artifacts see Line 5 in Fig. 3.. This advantage can be achieved because relationships among sub-systems are clearly defined in the assembly feature of the 3-D systems and hence the recombination of the sub-systems is easily accommodated. This capability is particularly useful in the development of a series of product lines that utilize the same sub-systems with different combinations. For example, this capability can enable firms to enter various product market segments efficiently as shown in the case study of Boeing discussed later in Section 5. Therefore, the strategic utilization of the 3D-CAD model can facilitate the adoption of a differentiation strategy by increasing the returns from developing multiple models and product families and by decreasing the marginal development costs of these models and families Arthur, 1989.. Since most firms face competitive markets in which more product variations must be developed and new products become quickly obsolete, capabilities that facilitate the development and accumulation of integrated systematized knowledge are important competitive tools Nobeoka and Cusumano, 1996.. The emerging 3DCAD model is becoming a critical technological tool for accumulating systematized knowledge with respect to complicated products that consist of numerous sub-systems and components. Finally, we should point out that even with the use of 3-D CAD systems, the importance of the humans role will not be eliminated see Line 6 in Fig. 3.. Although the sharing of knowledge among

colleagues is made more effective by the use of 3-D CAD, in order to systematize individual abductions so that they bring about concrete results, the individuals must make a conscious effort to understand the intentions of other members in the team and develop a common perspective and mental model. There must be face-to-face communication through co-location to accomplish these objectives. From this standpoint, it is understandable that Boeing and Microsoft, which have among the most advanced computer supported environments in the world, emphasize co-location of project members Cusumano and Selby, 1995..

4. Technical features of the 3-D CAD systems Let us illustrate four groups of factors which determine how the new generation of 3-D CAD systems influence knowledge creation in product development: 3-D full visualization, simulation, digital pre-assembly and communication and coordination. 4.1. 3-D full isualization Because all components are designed in 3-D, designers and engineers can access more relevant information during the drawing process by seeing and working on an entire form of the component. Engineers can see an entire design from any perspective in 3-D, whereas in 2-D design they see a component from a few fixed perspectives. In addition, in the 3-D design, shaded surfaces and lines are removed to improve visualization of designs. 2-D designs are often very complicated with too many lines, which can easily confuse even skilled designers Lynch, 1988.. Engineers can draw more details and exact shapes in 3-D, enabling them to consider the design from a multi-functional perspective. For example, manufacturability of components can be effectively considered in 3-D design since it enables greater details of component shapes to be defined and represented. There are also designs that can only be created with 3-D design process. For example, designers can much more effectively evaluate the aerodynamic character-

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istics of automobiles through the use of 3-D drawing tools Lynch, 1988.. With regards to the shift to 3-D design, we cannot ignore the fact that 3-D design requires different drawing skills from 2-D design. Designers do not have to transform their ideas for new components into two dimensionsthis historically being one of the major parts of designing in 2-D. The 3-D drawing process is more like clay work. Although it needs a different set of and perhaps more sophisticated skills requiring appropriate training and experiences, it can enhance knowledge creation capabilities in engineering in the long run. 4.2. Simulation It is much easier to perform simulation analysis of such problem as thermal, mechanical stress and vibration with 3-D design than with 2-D design. Designers and engineers must translate 2-D designs into three dimensions which is time consuming and costly. Therefore, when only 2-D CAD tools are available, simulation is rarely carried out during the design process and instead physical prototypes are made and tested. A combination of 3-D solid modelling and userfriendly CAE applications enables design engineers to conduct analysis by themselves as opposed to having specialists carry out the simulation analysis. When engineers can carry out both design and simulation activities they are able to consider design from wider perspectives and thus product development is enhanced. 4.3. Digital pre-assembly The digital integration of components, which is called digital pre-assembly, is a form of simulation analysis. It enables engineers to view an assembled set of components before physical prototypes are made. Real prototypes are costly and time-consuming to build. More importantly, it is usually not possible to manufacture an actual prototype before all of the drawings are completed to a certain degree. However, even when component designs are still at an early stage with rough ideas of size and shape, the

assembly of these components can be viewed using digital pre-assembly. 2 Digital pre-assembly helps engineers create a system-wide view of the final product particularly when the components are designed by engineers from different functional or component groups. Engineers can look for conflicts and interferences of fit between relevant components during the early stages of product development whereas it is almost impossible to see conflicts and interferences when engineers use 2-D tools. 3 3-D designs can further be used to analyze a products kinematic behavior, which is also almost impossible with 2-D design. This analysis includes ease of assembly using a digital prototyping feature in a 3-D solid modeling application, in which engineers can determine how easily workers can reach and assemble certain components. Coordination between engineers is usually not sufficient to catch interference problems because the problems, particularly those which appear during the products kinematic operation, often occur where engineers do not expect them. From the viewpoint of technology management, of all the benefits of 3-D design, digital pre-assembly may have the most influence on product development process. In developing a new product that consists of numerous interdependent components, many researchers argue that knowledge regarding system integration plays a key role in product integrity Clark and Fujimoto, 1991.. These authors insist that it is important for all engineers, particularly engineers responsible for different components, to coordinate their design activities at an early stage of product development, even before physical prototypes are available. Further, new product knowledge is often created through interactions between engineers working on
According to a component designer at Kawasaki Heavy Industries who worked on the development of the Boeing 777, he was able to begin making a digital assembly that included components being designed by other engineers at a stage when he had only a very rough idea of the component for which he was responsible. 3 According to one automobile engineer we interviewed, in an average product development project that uses 2-D design, about 70% of design changes during a project are caused by component interference problems.
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different parts of a product. The way in which components relate to each other is a critical element to architectural innovation Henderson and Clark, 1990., wherein a structure of the product is completely changed by the innovation. Digital pre-assembly may facilitate the implementation and perhaps the identification of these architectural innovations. 4.4. Communication and coordination The three factors discussed above all contribute to improvements in coordination and communication between different component designers, as well as between engineers from multiple functions such as design, manufacturing preparation, analysis and experiment. Communication and coordination play a central role in determining the effectiveness of concurrent engineering. Concurrent engineering can be implemented successfully only when people from different functional groups share similar knowledge and language. The 3-D CAD systems provide different functions with this common knowledge and language, which significantly improves coordination and communication effectiveness among designers and engineers. Components drawn in 3-D and prototypes assembled digitally can be a common reference to which all engineers from diverse functions can access during product development. Conversations in front of a 3-D CAD design often differ significantly from those in front of white board or engineering drawing Robertson and Allen, 1993.. The CAD representation of a design can be quickly changed during the conversation. Given this common reference, fewer misunderstandings occur and conversations are more effective Robertson and Allen, 1993.. 4 Members who specialize in testing or manufacturing are often not able to provide meaningful feedback with 2-D drawings since they are not very familiar with visualizing actual components when looking at a 2-D design. The ability to include a components design details in 3-D such as back views and rounded corners also supports communi-

cation between design and manufacturing engineers. Manufacturing engineers need to see the detailed shape of a component which cannot be sufficiently represented with 2-D drawings. In addition, because 3-D data can be used directly by manufacturing engineers for the development and design of dies and molds, this kind of data is transferred more quickly and frequently from design to manufacturing than 2-D data Robertson and Allen, 1993.. Finally, we have to note that 3-D CAD systems enhance communication and coordination only when all components are designed and stored properly in a database. The CAD systems are not immune from human errors. Although the systems are good at finding conflicts and interferences among components, when one or two components are missing, the system often provides wrong information. In addition, it is difficult for engineers to recognize these types of errors partly because the errors get propagated throughout the design system due to the shared data bases. This can result in significant problem that are typically not noticed until after production has started and thus are expensive to repair. Therefore, new design processes are needed that recognize when components are missing or are able to compensate for the lack of components.

5. The case of the Boeing 777 development One of the best implementation examples of the 3-D CAD Model is the development of the Boeing 777. The project was conducted as an international joint development project led by Boeing and involving five Japanese aircraft manufacturers. Although there have been a number of case studies written on this project, this discussion will focus on how the 3-D CAD model was implemented and how it changed the way the organization works Hayashi, 1994; Honda, 1995; Kanemaru, 1996; Nii, 1994; Takimoto and Tajima, 1995.. Boeing uses the term preferred process to describe its new development process which was first implemented with the development of the Boeing 777. The main features of this new process are: 1. concurrent product definition; 2. design build teams; 3. digital product definition; and 4. digital pre-as-

4 According to one automobile engineer, when 3-D representation is not available before physical prototypes are made, there are problems with the quality of discussion and information exchange.

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sembly. The first two features are associated with organizational and process changes while the latter two are directly related to the 3-D CAD systems. 5.1. Concurrent product definition (CPD) Concurrent product definition involves the determination of key design features for each component. As a core element of achieving concurrent engineering, it is conducted through concurrent operations between different design groups and between various functions such as design, test, production and materials. Interferences between components, manufacturability and product functionality are considered by all relevant project members from the very beginning of the project. Most project members from both Boeing and suppliers are co-located in Seattle during the CPD stage. 5.2. Design build team (DBT) Beginning with the CPD stage, many teams are created to facilitate smooth coordination between various functions. In the 777 project, in total, more than 250 teams were created. While most of these DBTs were focused on specific component areas, there were also teams created for specific engineering issues such as aerodynamics. A hierarchy of DBTs are settled in order to systematically manage the project. There are upperlevel DBTs that contain leaders of lower-level DBTs. Although this hierarchy of DBTs had been created before, the system of DBTs that was used in the Boeing 777 project was much more flexible than the product development organizations that had been previously used at Boeing. 5.3. Digital product definition (DPD) All components are defined using 3-D CAD data and these digital data are considered as the only medium for component definition in the project. The latest data are available to most project members in order to have real-time coordination between them. Access to data is determined by managerial level and group membership.

5.4. Digital pre-assembly (DPA) Digital pre-assembly is conducted from the very beginning of the development process. In order to simultaneously check for interference and manufacturability problems, digital pre-assembly is conducted even when there is a rough idea of the size and shape of the component. The four characteristics of Boeings 777 project seem to represent a combination of both Japans human-oriented and the systemic-rationality-oriented approaches of the US. Before implementing the new development process, Boeing conducted an activity it called learn the Japanese way in which it extensively studied the Japanese development model through visits to Toyota and other companies. In this study, Boeing learned the importance of cross-functional teams that are created at the very beginning of the project, which Toyota calls front-loading. The front-loading of activities enables the inclusion of other functional perspectives at the beginning of the project. In past Boeing projects, design engineers who held a great deal of power in Boeing, were allowed to conduct their work in a designer-centered fashion with little regard to downstream processes. One purpose of implementing DBTs was to create a more evenly balanced relationship between designers and production people in order that they can better exchange information and ideas on an equal footing from the early stage of development. The introduction of DBTs and CPD enabled concurrent drawing of designs, production instruction charts and tool charts. However, Boeing went beyond the traditional Japanese model partly since it was armed with much more sophisticated CAD systems than most Japanese firms. The introduction of digital pre-assembly facilitated cross-functional communication. 5 An additional problem often found in Japanese firms and that was handled well by Boeing concerns the distribution of power among project members. In the

5 According to some Japanese automobile engineers, even when they want to discuss design issues at the very beginning of a project, manufacturing and testing people sometimes cannot participate in the discussion unless they have a physical representation such as a prototype or a view of digital pre-assembly.

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Japanese projects, the more experience an engineer has, the greater respect the designer receives and thus the more likely his recommendation will be implemented. Although often times experience and correctness are related, in some cases experienced people make mistakes. In Boeings DBTs, digital pre-assembly and simulation activities made it possible to make decisions more on the basis of logic than just experience. The performance of the project was in many ways superior to past Boeing projects. First there were 75% fewer design changes than in previous projects. Both design changes for design improvement and those for design error corrections were reduced. A large portion of the changes for design improvement are typically caused by demands outside the design function; they range from manufacturing to customer services changes. The CPD and DBT activities enabled a reduction in this type of design change. Design error corrections, which are typically caused by parts interference problems, were reduced through digital pre-assembly. Other benefits included reduced engineering hours and a reduced number of prototypes, including mockups. Although the work load for project designers increased since they were responsible for both producing 3-D drawings and for producing the final design that incorporates manufacturing requirements and testing results, a reduction in engineering changes enabled a reduction in the number of total engineering hours. Further, a full-scale mock-up was not needed. Finally, the development method used for 777 project has facilitated the production of a robust design, i.e., the design of other models based on the 777 project. While the reuse of a component design is also easy when engineers use 2-D CAD, the 3-D CAD systems featuring digital pre-assembly made it also possible to reuse sub-assembly designs. The basic model with a 300 passenger capacity and a 5000-mile cruising range was first developed in May 1995. It was followed by a long cruising-range model with a cruising range of 7000 miles in December 1996. A stretched-body model with more than 350 passenger capacity is planned to be completed by May 1998 Honda, 1995.. The effective application of systematized knowledge to multiple products is becoming a more important method of competition

in many other industries Nobeoka and Cusumano, 1996; Nobeoka, 1996.. Although the development of Boeing 777 is an excellent illustration of the 3-D CAD model, we also recognize that there are some characteristics of aircraft development which make the 3-D CAD model easier to implement than in other industries. In the aircraft industry, design architecture and structure of components are relatively standardized. A standardized manufacturing and assembling structure exists which is called work breakdown structure WBS. and it is shared by most firms in the industry. In the WBS, all the work required for aircraft development is broken down into a tree structure. Through experience in joint development projects, both domestic and international, in which the main contractor subcontracts work to cooperating firms, a common WBS has emerged among many firms. This WBS includes standard individual operations, standard duration of time and standard combinations of different operations. This WBS has probably made it easy for Boeing to introduce the 3-D CAD model not just internally but with all of the cooperating firms and suppliers. Finally, although we have argued that Boeing seems to successfully integrate the Japanese humanoriented model with the advanced information technologies associated with the rational US model, it still faces a number of challenging problems. Boeing still maintains a rather traditional US attitude towards designers, production workers, suppliers and customer airlines. For example, at a Japanese supplier to Boeing, a manager has told us that although he respects Boeing in terms of its revolutionary management, he does not feel that his relationship with Boeing has reached the level of a Japanese-style partnership. Further, Boeing depends a great deal on temporary designers and production workers, it threatens them if they do not deliver improved designs and it beats up on its suppliers. It appears that Boeing still has a lot to learn with respect to teamwork. 6. Necessary changes in organizational structure and process The firms we interviewed in Japan are trying to introduce the new 3-D CAD systems like the one

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Boeing used in its 777 project. This section summarizes the issues and necessary changes they are struggling with. In general, there needs to be a good fit between development tools such as CAD systems and organizational process for firms to perform well Adler, 1989; King and Majchrzak, 1996.. Regarding CAD systems, there are two types of misfits between technology and organizational process. First, many studies argue that unless certain organizational changes are made, the potential benefits of CAD cannot be achieved Adler, 1989; Huber, 1990.. For example, when 3-D drawing tools are introduced, new coordination mechanisms are needed so that process engineers can effectively use the data. Second, there is another type of misfit where changes in organizational processes are not effectively supported by CAD tools. For example, when firms change organizational processes to implement concurrent engineering to shorten development lead time, the processes may not work well due to inappropriate development tools such as 2-D CAD. In order to avoid these misfits, there are several important factors that should be considered with respect to organizational management. We discuss these factors in three groups below. 6.1. Local optimization s. total optimization One of the major factors that has been delaying the adoption of 3-D CAD systems at Japanese firms is the tendency to attach importance to local rather than total optimization. Each functional group tends to think only in terms of its local efficiency. For example, it takes much longer to develop a 3-D design than a 2-D design, particularly at its introduction stage. Therefore, most designers do not have an incentive to introduce 3-D design tools because it would lower their local efficiency. The benefits of 3-D design can be realized at the project level where digital pre-assembly and smooth
Table 2 CAD systems at three major Japanese automobile manufacturers Firm A Body Chassis Power train 3D wire-frame and surface 2D 2D Firm B

data transfer between design and manufacturing engineers help reduce engineering changes and improve the products manufacturability. However, the Japanese firms we interviewed have not yet introduced 3-D CAD systems in this manner. Presently, the automobile firms are using 3-D CAD as a prime design tool for only body design where benefits exist at both local and project levels. It is almost impossible to draw body designs in 2-D, because they have complex 3-D curves see Table 2.. A different situation exists for chassis and power train, however. Two of three firms still primarily use 2-D tools for chassis and power train design. Engineers for chassis and power train design at these firms mentioned that it is much easier for them to design these components in 2-D. It would take many more engineering hours using 3-D, particularly initially. At the firm which has introduced 3-D CAD design for the chassis, the CAD systems include a digital pre-assembly system for both body and chassis components. According to one systems engineer, the digital pre-assembly feature has made the introduction of 3-D CAD systems effective.

6.2. Deelopment of multi-skilled engineers Two new engineering skills are needed in order to benefit from sophisticated features of the 3-D CAD systems. First, individuals need to unlearn old skills and replace them with new skills. For example, with 2-D design, a significant design skill is the ability to convert design ideas into 2-D drawings. With 3-D design, conversion to 2-D drawings is unnecessary and 3-D solid modeling skills become essential. Second, in order to fully utilize 3-D solid modeling, designers need to have skills that previously existed in other functional groups. With 3-D solid modeling, component designers can both draw details of components and can incorporate manufactur-

Firm C 3D wire-frame and surface 3D wire-frame 2D

3D wire-frame and surface 2D 2D

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ing requirements more extensively in the design than with 2-D design tools. However, in order to do this effectively, component engineers need more knowledge about manufacturing requirements. Similarly, design engineers can perform simulation analysis rather easily using CAE in combination with 3-D solid modeling. In particular, simulation analysis has become much easier to carry out with new CAD features such as automated FEA modeling. If design engineers were to conduct the simulation analysis, the potential coordination cost between designers and CAE specialists can be saved. However, traditional design engineers do not usually have the proper knowledge needed to do CAE analysis. Thus, multi-skilled design engineers will enable organizations to more effectively utilize the new 3-D CAD systems through effectively integrating tasks that used to be allocated to multiple people and functions. Turning our discussions from ideal to reality, even if multi-skilled design engineers do not actually perform these tasks, organizations will benefit from the existence of the 3-D work environment. Because engineers in different functions have different skills, knowledge and culture, it is traditionally difficult for them to share a single representation of works in progress King and Majchrzak, 1996.. However, 3-D solid modeling and digital assembly feature could be the single common representation for multiple functions.

6.3. Process changes and functional restructuring The traditional divisions of functions or tasks are based on traditional development tools. The 3-D CAD systems require a new division of tasks, which will lead to a new process and a new organization. In particular, multiple tasks that used to be performed by different functional engineers can be conducted by a single function of engineers in the 3-D CAD model. According to the automobile engineers we have interviewed, as CAD systems become more sophisticated, more tasks can be done by upstream functions. Many tasks that are traditionally done by manufacturing engineers are now expected to be done by design engineers. For example, component engineers can design more component details using 3-D CAD, which in the case of 2-D CAD are done by manufacturing preparation engineers. Design engineers are also expected to perform more CAE analyses that used to be done separately by CAE engineers. While there is still a mixture of 2-D and 3-D design in most firms, in the 3-D CAD systems, designers will have to draw all components in 3-D. In this case, a number of different tasks will be integrated into one task through the common CAD tool. One possible change in task structure is depicted in Fig. 4; task processes 1 and 2 could be considered as design and testing, or design and

Fig. 4. Potential needs of changes in task and organization structure.

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manufacturing preparation. Each task is now performed by a separate functional group. However, in order to fully realize the benefits from the new 3-D CAD systems, a single functional group may have to be responsible for the converged tasks. In spite of these needs for organizational changes, however, some of the engineers we interviewed argued that it will be difficult to change an organizational structure that has been maintained for many years. The engineers pointed out two potential problems. First, there may be resistance from functional groups mainly because of power issues. Second, engineers and managers need to learn more skills and knowledge to perform the converged task processes.

7. Conclusion This study argues that the new 3-D CAD systems are playing a central role in the creation of knowledge-based product development model. Earlier versions of CAD systems were considered as tools that improve efficiency within a traditional product development process. However, the 3-D CAD systems have the possibility to improve the knowledge creation capabilities of engineers which is regarded as a critical element in a firms product development activities. This change in the perception of the role CAD systems are expected to play in product development has been made possible through technological improvements in the tools. It is only since the early 1990s that 3-D solid modeling CAD could be effectively used for an entire product development process including design, testing and manufacturing of many components. Now, the most important issue is how firms can make the most of the new 3-D CAD systems. This requires firms to clearly understand the new tools potential benefits and to change the firms product development process. In order to understand its benefits, this paper first proposed conceptual models that compare the traditional 2-D CAD systems and the new 3-D systems in terms of their contributions to knowledge-based product development. In the 3-D CAD model, ITs contribute not only to efficiency improvements in inductive and deductive reasoning processes, they

also improve abductive reasoning process at both the engineer and organization levels. We argue that abductive reasoning is a key mechanism in product development. The contribution of the 3-D CAD model to abductive reasoning process is primarily enabled by the combination of three technical features of the 3-D CAD tools: full visualization of components as well as the entire product during design processes, a digital pre-assembly capability that features topological information among components and a simulation capability that enables quick and frequent iterations of trial and error. Together, these three features improve coordination and communication among cross-functional designers and engineers through an integrated data format in 3-D and a networked exchange of information. This paper also discusses the factors that hinder an effective introduction of the 3-D CAD model, as well as potential management and organizational requirements for successful adaptation. In order to effectively implement the 3-D CAD model, firms need to have both long-term and system-level perspectives. In addition, the new tools will definitely require engineers to adapt new skills. In particular, they need integrated skills that are now scattered over multiple functions. The leading firms in the introduction of the new 3-D CAD model are US firms such as Boeing whose 777 project was briefly described in this paper. Further, while many US firms have been implementing the Japanese human-oriented approach in product development, many Japanese firms have begun to implement the Western systemic-rationality-oriented approach represented by the technological characteristics of the 3-D CAD model. In order to create a new paradigm of knowledge-based product development, active mutual learning among different industries, countries and cultures becomes indispensable.

Acknowledgements The authors are indebted to two anonymous referees, Jeffrey Funk, Hiroyuki Yoshikawa, Naomasa Nakajima, Tetsuo Tomiyama, Takashi Kitiyama, Yasushi Umeda, Ikujiro Nonaka, Michael Cusumano and Stephan Thomke and the participants of Inter-

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Y. Baba, K. Nobeoka r Research Policy 26 (1998) 643659 Honda, S., 1995. Boeing 777 haseigataki kaihatsuniokeru DBT katsudo. wDBT activity of Boeing 777 series developmentx Aircraft Symposium Proc. 33, 253256. Huber, G., 1990. A theory of the effects of advanced information technologies on organizational design, intelligence and decision making. Acad. Manage. Rev. 15 1., 4771. Kanemaru, M., 1996. Boeing 777 no kokusai kyodokaihatsu yoriyoi kaihatsu purosesu no kakuritsu omezashite. wInternational joint development of Boeing 777in search of preferred processx Nihon Kikai Gakkaishi 99 932., 3639. Kaplinsky, R., 1982. Computer-Aided Design. Frances Pinter. King, N., Majchrzak, A., 1996. Concurrent engineering tools: are the human issues being ignored?. IEEE Trans. Eng. Manage. 43 2., 189201. Kogut, B., Zander, U., 1992. Knowledge of the firm, combinative capability and the replication of technology. Organization Sci. 3 1., 383397. Liker, J., Fleischer, M., Nagamichi, M., Zonnevylle, M., 1992. Designers and their machines: CAD use and support in the US and Japan. Commun. ACM 35 2., 7795. Lynch, M., 1988. The externalized retina: selection and mathematization in the visual documentation of objects in the life sciences. Human Studies 11, 201234. MacDuffie, J., Pil, F., 1996. Performance Findings of the International Assembly Plant Study. International Motor Vehicle Program, MIT. Unpublished working paper. Nakajima, M. Ed.., 1995, Chishikishisan no Saikochiku Reconstruction of Knowledge Assets.. Nikkan Kogyo Shinbunsha. Nakajima, N., 1996. Learning as Making for Fundamental Engineering Education. A paper presented at the 2nd International Symposium on Research into Artifacts, Tokyo.. Nii, S., 1994. DBT katsudo ni motozuku seikahokoku. wReport on DBT activityx Aircraft Symposium Proc. 32, 3134. Niwa, K., 1995. Jyohokiban no seibi to soshikichi no kenkyu no shintenkai. wA new approach to organizational intelligencex J. Jpn. Soc. Manage. Information 4 2., 99113. Nobeoka, K., 1996. Multi-project Senryaku Multi-project strategy.. Yuhikaku. Nobeoka, K., Cusumano, M., 1996. Multi-project strategy and sales growth: the benefits of rapid design transfer in new product development. Strategic Manage. J. Forthcoming.. Nonaka, I., 1994. A dynamic theory of organizational knowledge creation. Organization Sci. 5 1., 1437. Nonaka, I., Baba, Y., 1992. Creating and transferring manufacturing knowledge in Japan: the case of die and mold industry. In: Okamura, S., Sakauchi F., Nonaka, I. Eds.., New Perspectives on Global Science and Technology Policy. Mita Press. Nonaka, I., Takeuchi, H., 1996. Knowledge-Creating Company. Oxford Univ. Press. Nonaka, I., Umemoto, K., Senoo, D., 1996. From information processing to knowledge creation: a paradigm shift in business management. Technol. Soc. 18 2., 203218. Robertson, D., Allen, T., 1992. Managing CAD systems in mechanical design engineering. IEEE Trans. Eng. Manage. 39 1., 2231. Robertson, D., Allen, T., 1993. CAD system use and engineering performance. IEEE Trans. Eng. Manage. 40 3., 274282. Robertson, D., Ulrich, K., Filerman, M., 1991. CAD and cognitive

national Comparative Study of Knowledge Creation Conference for their comments. The authors thank the Sasagawa Peace Foundation for funding research that initiated the thinking behind this paper.

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