Work distribution in global product development organizations

The evolution of the internet, digital design tools, and more importantly, increasing access to global markets and workforce, has increased the interest of firms in offshoring their engineering and product development activities. However, there exist challenges in coordinating and collaborating across time zones, cultures, geographical locations, and organizations. These challenges are magnified in the case of firms engaged in the design and development of complex engineered products. Our field study of the global engineering efforts of five firms showed that offshoring success is largely affected by the choice of the offshoring content, the architecture of the firm's products, and the organization choices of the respective firms. This led us to frame our research questions as: How does a firm optimally structure the global work distribution, over time, of its product development organization? How does the firm's architecture affect these work distribution decisions? Arguing based on existing literature in operations management, product development, and organizational economics, we identify coordination effort required between locations as a key contributing factor towards the performance of global product development organizations. We segregate the time required to complete a product development task between work time and coordination time, and define the index of modularity for offshoring as the ratio of the work time to the sum of work time and coordination time.