E L S E V I E R Int. J. Production Economics 52 (1997) 283-290

intemationalJoumal of

prcKluctlon e c o n o m i c s

Physical or virtual team collocation: Does it matter?

Kulwant S. Pawar a'*, Sudi Sharifi b

~Department of Manufacturing Engineering and Operations Management, University of Nottingham, University Park, Nottingham NG7 2RD, UK

bSchool of Management, University of Salford, Salford, M5 4W'I] UK

Abstract

The aim of this paper is to examine aspects of team collocation within the context of Concurrent Engineering (CE). The paper considers the product design as an incremental innovation process. It argues that design activities have implications for people and structures of the organization. One key aspect of these activities is the adoption of a teaming approach and therefore formation and building of teams. Notions of teaming and team building have been around for many decades and can be traced back to the classic "Hawthorne experiments" and the development of "human relations" ideas. However, the current and future trends favour the increasing use of communication technology and "virtual teaming". In this paper we evaluate the role of "teaming" in the product design process and its impact on the implementation of CE principles. The empirical work presented in this paper includes a case example based on an on-going observation of a product design process in a large multi-national manufacturing firm in the UK and an observation of the workings of a pan-European research project, namely PACE.

Keywords: Collocation; Concurrent engineering; Product design; Teaming; Team performance

I. Introduction

Over the last five decades the role of design as a function within organizations has changed signifi- cantly. In earlier periods design perspective was limited to design for manufacture. This interface expanded to include other aspects of product/pro- cess design, i.e., marketing, sales, services, R&D and more recently recyclability and environmental issues (Pawar, 1994). This expansion of the span of consideration of the design function highlighted the desirability of "integration". Equally, it required

*Corresponding author.

the design function to become more flexible and organic in order to operate within an increasing competitive environment.

The role of design, both product and process, and designers are, central to maintaining the com- petitive edge of the organization. Frequently, the process of design and, in particular, product design has been portrayed as a straightforward, routine and known set of decisions and activities. We argue that design process involves decision episodes with fluid participation of different actors (designers, not necessarily the technocrats, and the experts), who enter and exit the design arena. Their interac- tions shape the outcome of the process; the final product and its production (Sharifi and Pawar,

0925-5273/97/$17.00 Copyright © 1997 Elsevier Science B.V. All rights reserved PII S0925- 5273 (97)00039-3

284 K.S. Pawar, S. Sharifi/lnt. J. Production Economics 52 (1997) 283-290

1993). The iterative nature of the design process is partly to highlight the point that a great deal of the design activity becomes re-defining and redesigning of the conceived ideas. Furthermore, it questions whether redesigning can be or should be minimized by focusing on the trigger and compilation of specification stages and/or by adopting a teaming approach.

The fact that the design process includes re- designing shows that customer requirements and their scrutiny of the design outcome, their experien- ces will become integral to the frame of reference of the enterprise. Furthermore, the role of design function may also be re-defined here, and can become one which will maintain the continuity of the process and is to do with coordination and communication which are the essence of concur- rent engineering. This, indeed, emphasizes integra- tion of functions involved in the product design process.

2. Many faces of concurrent engineering

Concurrent engineering has been described in different ways with various implications. The vari- ation in descriptions has arisen from different em- phasis put by theoreticians and practitioners on the nature of what we may refer to as an organizational innovation and its properties for improving the performance of product design and manufacture and ultimately the competitiveness of the organiza- tion. The adhocracy in description can be shown in the following extracts which either include the steps for implementation or a list of its benefits. The underlying assumptions seem to be that most or- ganizations within the manufacturing sector share similar contextual elements, i.e. similar structural, environmental characteristics and above all mana- gerial recipes.

For instance, Garrett (1990) describes CE in terms of "simultaneously designing of products and defining the best way to make it. . . in order to reduce costs and cycle times...". Green (1990) sees it as "an approach that involves manufacturing operations and other departmental functions through the enterprise in the design of a product". Similarly, Duffy (1989) shows that in CE "all the

disciplines involved in product design work to- gether from onset to bring a unique, quality prod- uct from concept to market in less time and at a competitive cost".

However, Hurst (1993) reminds us that the pur- pose of CE is not just to reduce time to market. It can, as a method, improve the performance of the organization as a whole. Abdalla and Knight (1994) describe CE as a philosophy and extension to TQM. They also assume that there is a CE strategy which ensures the involvement of all functions con- cerned. Ennis and McKeag (1994) see it as a philos- ophy for performing different tasks concurrently in developing a product. All these descriptions share the assumption that CE is a means to improve the quality of product design process which is reflected in their suggestions for the development of proced- ures for implementation.

A further point, here, is about the emphasis which is put on the "integration" function and roles in the form of "multifunctional teams" or task forces. The proposition that the "engineers" need to be "coached in order to work in teams" (Canobine, 1991) allows us to assume that there is also a need for changing actors" mind sets or ways of thinking about problems or their personal and organiza- tional needs or what is frequently and loosely refer- red to as "culture". So the propositions are about collaboration within the organization and with stakeholders, who operate outside the assumed boundaries of the organization. In Bryson and Eden's terms (1995) "collaboration is the process intended to foster sharing that is necessary among involved or affected groups or organizations in order to achieve the collective gains or minimize the losses". This process requires definition of goals which will be the desired outcomes that the organ- ization intends to pursue.

3. Teaming within a concurrent engineering context

Perhaps the most obvious and prevalent feature of CE is the use of multi-disciplinary teams. The primary mechanism for adopting CE philosophy centres around the assemblage of people with spe- cialized skills, experience and perspectives on the product development process. Such teams are

K.S. Pawar, S. Sharifi/Int. J. Production Economics 52 (1997) 283-290 285

expected to comprise capable individuals repres- enting the relevant departments in the organization and to continue for all phases of product life cycle. The latter concern underscores the need to estab- lish long-term relationships with, and facilitate intimate involvement in the process by, both cus- tomers and suppliers or subcontractors.

Successful use of teams is neither new, nor is it unique to CE. The early "human relations" studies including the "Hawthorne experiments" and Tavi- stock's "socio-technical" systems highlighted the extent that groups interactions, their cohesion and conformity could enhance their performance in the work place. Lockheed's use of highly motivated teams, called "skunk works", was used effectively in the 1940s. "Tiger teams", "process action teams" and "integrated product development teams" are also other labels used to emphasize the role of team work and teams in enhancing the performance of organization. However, the point to note here, is that use of multi-disciplinary teams does not neces- sarily constitute CE.

Writings on benefits of teams have stressed on focusing resources in developing the team philos- ophy which is likely to yield optimum results for achieving integration between product and process design (Smith and Reinertsen, 1947). There are four aspects attached to this philosophy: responsibility, commitment, multifunctionality, and experience and proficiency (Bower and Hout, 1988). This im- plies that teams will comprise experienced and expert individuals whose commitment can be main- tained by empowering them and endowing them with autonomy and discretion over their task re- lated decisions. However, it is important to point out here, that the span of discretion for the team members simply remains within the task bound- aries and indeed may not include involvement in such "strategic" decisions as product innovation, or resource allocation.

The commitment and sponsorship of the top management is said to be a major element of suc- cessful implementation of concurrent engineering and indeed teaming approach (Wheelwright and Clark, 1992). There are factors including size, associated with the successful establishment and performance of teams in concurrent engineer- ing. We argue that, intra-team communication,

particularly, becomes even more focal to the perfor- mance of the team considering the variation that can exist among the members of the team in their understandings and interpretations of the "design language".

In addition to reducing costs and time to market, which are expected primary outcomes of establish- ing multi-disciplinary teams, there are some other outcomes identified, such as: • pooling of knowledge, • opportunity to leverage skills, • conducive work environment, • increased self-motivation, • increased inter-departmental communication, • improved product quality. However, these outcomes may be achieved if indeed the continuity of the membership of the team, ad- dressing similar development efforts, is maintained over time.

It may be noted here, that the success of Japanese style of organizing has frequently been associated with the establishment of interdisciplinary and cross-functional groupings. These teams/groupings acting as entrepreneurial units can create the elusive collaboration between different functional disciplines by means of collocation.

4. Collocation and performance of teams in product design process

Rafii (1995) has defined collocation as, "... phys- ical proximity of various individuals, teams, func- tional areas and organizational sub-units involved in the development of particular product or pro- cess..." (p. 78). Major benefits of "collocation" are described in terms of increased interactions and ease of informal communication and increase in efficiency of resource use. However, Rafii sees these gains as illusory and argues that in a globalized manufacturing and trade world "centralized collo- cated product development" activities will become inefficient. That, there are also "differences in out- look, beliefs and goals" of those involved in the process which are "reinforced by the structure of the organization". Virtual integration, accordingly, is achieved via effective use of information techno- logy which can provide a design data base to be

286 K.S. Pawar, S. Sharifi/Int. ,Z Production Economics 52 (1997) 283-290

shared and a disciplined development process and it may neutralize, we argue, to an extent, the hier- archical positions of team members in the develop- ment process.

5. Physical collocation

The following provides a brief account of the authors' observation of product design process based on physical collocation of the design team in Cookwell Ltd., a manufacturing firm.

Cookwell had adopted a functional organiza- tional structure. It set up teams on an ad hoc basis whereby contribution from other functional disci- plines to the design process were sought as and when required. A pilot project was introduced by the top management and lasted for 18 months and aimed at developing 20 products in a family. The specific aims of the pilot project were: • to minimize parts and fixings, • to maximize features and minimize costs, • to maximize usage of standard components, • to standardize basic core design and • to offer the flexibility for customization at the

later stages of design process. It required the design team to be physically collo- cated and this was seen as a way of introducing CE principles and practices at the company. The collo- cated team comprised five full-time and four part- time members from different functions. The main objectives for the establishment of the team were: • to shorten product design and development lead

time, • to break down functional barriers, • to improve communication, • to eliminate reiteration in the design process, and • to empower engineers. The designers would design according to given guidelines and specifications drawn up by market- ing and pass it onto other members to be costed, and considered for scheduling. Team would set targets taking into account the complexity of speci- fications. A prototype would become the object of discussions for improvements and possible redesign.

The performance of the team was monitored monthly by the Technical Director of the firm.

Collocation, in the first instance, reduced the design and development lead time and reiterations by 17%. There was a significant reduction in the num- ber of components used in the end product (Team managed to reduce the complexity of the design yet maintaining its functionality and characteristics). There was also a 35% reduction in total investment in tooling. The ownership of design problem was more widely shared. For instance, one team mem- ber commented "we have shortened time-scales and broken down communication barriers to a certain extent by using collocation approach to designing and developing new products". Whereas, project teams set up previously did not render the desired outcomes regarding innovation in the design of products. Then, there was a tendency among mem- bers to deal with design issues on casual basis and designers did not share ideas with other actors. However, some structural problems were encoun- tered during the lifetime of the collocation project. For instance, there seemed to be an on-going delay in the communication of market research informa- tion. This led to the design freeze being postponed and dealt with it later in the development process. Subsequently, some mistakes in design were identi- fied at pre-production trial runs. Whilst other mis- takes were identified during assembly operations. It may be noted here, that physical collocation of design team was part of an experiment to improve time to market in the design process, and was parachuted on the existing structural arrangements and thus roles and responsibilities of those involved were not redefined. Moreover, the firm"s approach to collocation was fragmented and the need to improve quality meant, increase in the amount and forms of information available which complicated the process further.

6. Virtual collocation

In virtual teaming integration of design/develop- ment activities is often achieved via the use of such communication means as post, telephone, fax, video conferencing, E-mail and sharing electronic data bases. Indeed, these means are used to simulate face-to-face communication. The PACE project is an example of this simulation. It is a

KS. Pawar, S. Sharifi/Int. ,Z Production Economics 52 (1997) 283-290 287

pan-European consortium of eight partners. It ad- dresses the product design process through three main components:

(i) A knowledge platform which is a computerized knowledge base representing the most up to date CE knowledge presented to the user in a structured and cohesive manner. It also con- tains the experience of four industrial com- panies introducing CE by using the PACE tools, techniques and methodologies during the PACE project.

(ii) A Workbench: Comprises six individual com- puterized and paper-based tools and underly- ing methods providing decision support during CE introduction. The addressed areas are team building, tool selection, organization structure modelling, Formal analysis of information ex- change, cost-benefit analysis, and performance measurement.

(iii) CE implementation framework: This provides a generic CE implementation methodology in- cluding implementation scenarios describing

the use of the PACE product and pilot projects at user's sites for testing and evaluating the customized usage of the PACE product.

Team building is a support tool for implementation of CE which is developed within the workbench component, as shown in Fig. 1.

The issues of integration, collaboration and teaming are some of the foci of the "workbench", which is one of decision tools in the project. The main objective of PACE has been to develop tools and techniques to support the implementation of CE. There are shared tasks, activities and resources. In order to fulfill these objectives and tasks, the project partners need to communicate regularly to keep abreast of developments. This way of operat- ing has been enabling as well as constraining. It can pull together the experiences and knowledge of partners involved in each task. However, if the boundaries of responsibilities are fuzzy, the desired task outcome will not be fully realized. Commit- ment of those involved is essential ingredient of the process. However, here, meetings can happen at

Knowled~le Platform general

Concurrent Engineering information

use platform as data repository I

cost / benefit analysis tool selaeti0n

team building change of organisation

analysis of communication performance

structures measurement

Workbench

supported by workbench tools

company i V Query specific Representation information

Input

use platform as data repository

I implementation pilot project methodology definition

support r

l o = l ...... .... pilot project

planning, execution + evaluation __ J

user functions

Implementation Framework

Fig. 1. Infrastructure components and their relationships.

288 K.S. Pawar, S. Sharifi/Int. J. Production Economics 52 (1997) 283-290

regular intervals. During the periods in between partners have to make use of other means of com- munication which are restrictive and restricted due to technological and non-technological reasons. The tasks are defined by the PACE partners and naturally are interrelated and interdependent, hence, progress or delay in one task can impact related tasks. The point here is that communica- tion, commitment and continuity are essential as- pects of integration virtual or physical. Therefore, the process operates to deliver the desired outcome if it contains a predictive mechanism which may highlight any hiccups or performance gaps.

The two case examples highlight the differences between virtual and physical collocation in terms of social, technical and structural issues including: so- cial interactions and brain storming, sharing of knowledge and other resources, commitment and motivation to participate, technological compati- bility, design and development time and monitor- ing of the progress and performance.

7. Physical v s virtual: A question of choice

Proximity of team members: In physically collo- cated teams proximity of members is usually close whereas in virtual teaming it is usually remote.

Nature of interaction: In physically collocated teams actors have greater opportunity to share work and non-work related information. In virtual teaming, the extent of informal exchange of in- formation is minimal. For instance in Cookwell Ltd., where teams were physically collocated, there was continuous and steady flow of information. Whereas in the case of PACE project there was a cyclical pattern to the exchange of information between the collaborating bodies, triggered mainly by the time schedule for the meetings. The fre- quency of information exchange increased signifi- cantly between members as the date of scheduled meetings approached.

body will have to have access to similar technical and non-technical infrastructure leading to accu- mulated resource provisions and due to being geographically apart and working in different locations.

Control and accountability (over and within the pro- ject): In physically collocated teams close proximity of the actors and the project manager provides the context for ongoing monitoring of activities and events and thus enhances their ability to respond to requirements. In PACE project, attempts were made to define tasks clearly at the outset, yet fre- quently these tasks were not fulfilled in time or according to their technical requirements. The col- laborating bodies were accountable to the task leaders and the project coordinator who had lim- ited authority to enforce any penalties for failure to achieve their tasks.

Workin9 environment: In PACE project it seemed that partners encountered motivational problems; feeling isolated and frustrated as they were not sometimes able to share ideas or dilemmas with other partners. Some insignificant queries at times turned to become major issues due to lack of im- mediate access to other partners and their views. Cookwell Ltd. faced different dilemmas. Whilst the team members could communicate with each other more readily, they encountered constraints access- ing information and interacting with others outside the collocated team within the company.

Cultural and educational background : In physical collocation usually the members of the team are likely to have similar and complementary cultural and educational background since they have gone through the same recruitment and selection pro- cedures and thus are employed by the same organ- ization. Whilst in PACE project the team members varied in their education, culture, language, time- orientation and expertize. There were also conflict- ing organizational and personal goals amongst the members of the virtual team.

Utilization of resources: Physical proximity in- creases the opportunity for allocation and sharing of resources (including technical, human and finan- cial). Whilst in virtual teaming each collaborating

Technological compatibility: A physically collocated team, situated and operating within a single organ- ization, faces minimal incompatibility of the tech- nological systems used for product design and

K.S. Pawar, S. Sharifi/Int. J. Production Economics 52 (1997) 283-290 289

development. However, in a virtual situation this compatibility between different systems in collab- orating organizations ought to be negotiated at the outset. In the case of PACE project the means for communication had to be agreed upon at the be- ginning to avoid any delays in fulfilling the objec- tives of the project. However, during the course of the project there were significant technological de- velopments which impacted the agreed means of communication.

8. Concluding remarks

There has been increasing pressure on organiza- tions to enhance their chances of survival in the turbulent and changing environments. Perfor- mance enhancement has implied and involved the use of advanced and hi-tech means and the organ- izational implications of their adoption. The organ- izational implications have included cultural and structural revisions for those organizations em- barking on change and innovation. Organizations are encouraged to abandon their old ways of doing things and create mechanism which increase integration of the members and their activities and the flexibility of their structural mechanisms. In the last few decades, writings on management of change and innovation and those organizations which have been involved in innovative product design and development have increasingly moved away from functional thinking and towards multi-disciplinary ways of organizing their design and development activities. Teaming or establish- ment of teams has been seen as the means for achieving successful innovative product design as well as integration of different functional disciplines.

Integration is the essence of the concurrent prod- uct design and development activity in many or- ganizations. There are various ways of achieving integration in this context which need to incorpor- ate, we argue, the use of computer-integrated de- sign and manufacturing methods; e.g., CAD, CAM, CAE, the use of a variety of analytical methods, and the use of cross-functional teams. These three elements operate effectively in a collocated team environment.

The example of Cookwell Ltd. showed that teaming and physical collocation rendered planned economic gains by reducing product design lead time, lowering number of component used, reduc- ing investment in tooling, and simplifying product assembly process hence reducing number of people required on the assembly line and achieving pro- ductivity gains.

In the so-called globalized environments organ- izations are pushed to undertake design and development activities in a muti-perspective, multi- cultural, multi-linguistic and diverse techno- logical context. The efficient use of resources and reduction in cost have remained at the top of the agenda of firms involved in design and develop- ment of new products. We have attempted to illus- trate this type of environment through PACE project where issues of communication, negoti- ation, commitment, control and accountability are central to the successful operation of a virtual team collocation.

Notions of teaming and team building have been around for many decades. They contain assump- tions about human social needs and their impact on work performance. We have illustrated that teaming as a means for implementation of CE can be enabling as well as constraining. It is enabling as it increases the opportunity for collaboration and interchange of ideas and will have tangible impact on the design process reducing iterations and re- design. It is constraining as it may degenerate into "groupthink" syndrome. Moreover, as shown in one of our examples, the team's improved perfor- mance may be attributed to a kind of"Hawthorne effect". The team operates, more or less, as an autonomous work group under subtle control mechanisms such as weekly and monthly feedback meetings with top management. Nevertheless, col- location has a role to play in global business envi- ronment provided that relevant infrastructures, including computer-based information systems, are in place.

Acknowledgements

PACE project is funded by the European Com- mission under the Brite-EuRam initiative (Grant

290 K.S. Pawar, S. Sharifi/lnt. dr. Production Economics 52 (1997) 283-290

Number BE 8037-93). The authors wish to acknow- ledge the support of members of the PACE consor- tium.

References

Abdalla, H., Knight, J., 1994. Concurrent engineering- a com- petitive strategy. Lean Production: from Concept to Prod- uct. IMC-11. Proc. September.

Bower, J.L., Hout, T.M., 1988. Fast-cycle capability for competi- tive power, Har. Bus. Rev. 66(6), 110-118.

Bryson, J.M., Eden, C., 1995. Addressing public problems through collaboration: the role of 'not-goals' and the prob- lem of assessing accountability for their achievement. Paper presented at the 2nd Internat. Workshop on Multi- organisational Partnerships: working together across organizational boundaries, Glasgow, June.

Carrabine, U, 1991. Concurrent engineering: narrowing the edu- cation gap. Compu. Aided Eng. 10(10), 90-94.

Duffy, J., 1989. United front is faster. Mgmt. Today November, pp. 131-139.

Ennis, D., McKeag, 1994. Simultaneous engineering: the new philosophy for global manufacturing. Lean Production: from Concept to Product. IMC-11 Proc. September.

Garrett, R., 1990. Eight steps to simultaneous engineering. Manuf. Eng. 105(5), 41-47.

Green, A., 1990. Concurrent engineering: improving time to market'. Prod. Inv. Mgmt Rev. 10, 7.

Hurst, D., 1993. Concurrent engineering- a management chal- lenge. In Nolan, P. (Ed.), Innovation in Product Design. IMC-10 Proc. September, pp. 27-44.

Pawar, K.S., 1994. Implementation framework for concurrent engineering in the European context. Proc. 1st Conf. on Concurrent Engineering, Research and Application (CERA), West Virginia, USA, August pp. 111-118.

Rafii, F., 1995. How important is physical collocation to product development success? Bus. Horizons, 78-84.

Sharifi, S., Pawar, K.S., 1993. Product design: an interdisciplin- ary approach. In: Nolan, P (Ed.), Innovation in Product Development. IMC-10 Proc., September, pp. 15-26.

Smith, P.R., Reinertsen, D.G., 1991. Developing Products in Half the Time. Van Nostrand Reinhold, New York.

Wheelwright, S.C., Clark, K.B., 1992. Revolutionizing Product Development. Free Pess, New Yorks.