Simulation, learning and R&D performance: Evidence from automotive development

It is shown that computer simulation is already having a dramatic impact in at least one very critical area—the design for crashworthiness—and is rapidly changing other important fields as well.

Abstract

As pressure to conduct research and development (R&D) faster and more efficiently has increased over the years, firms have embraced many novel technologies and approaches in an attempt to develop new capabilities that would give them an advantage over their competitors. While the connection between building and renewing capability and performance has been shown in a number of different settings, the contents and routines of many such capabilities have not been studied in detail and the processes by which these capabilities lead to performance gains are still somewhat unclear. In this paper, I will try to provide a better understanding of one rapidly emerging capability—the ability to utilize advanced simulation in R&D—and examine how it can affect performance and the associated learning process. With the aid of a detailed empirical study in the area of automotive development, I will show that computer simulation is already having a dramatic impact in at least one very critical area—the design for crashworthiness—and is rapidly changing other important fields as well. First, by speeding up and simultaneously reducing the cost of design iterations, developers can increase the frequency of problem-solving cycles while reducing the total amount of time and money spent on R&D. Second, the ability to conduct more diverse experiments with novel technical possibilities and to learn more effectively than with alternative methods can lead to better R&D output. The implications for managerial practice are discussed and suggestions for further research undertakings are provided.