A system-dynamics study of a resource-based approach to process development strategy

Abstract

In their effort to reach the market in the minimum time with optimal cost firms have to consider their time strategies for process development, capacity built-up and subsequent learning by-doing. Short-term strategies might seek early production launch and subsequently look to improve performance through learning by doing, while a longer-term strategy would seek to enhance the learning effect across projects. A resource-based view would seek to establish which resources underpin the interacting activities described above. Here, the impact of alternative time and learning strategies is examined, assuming specific cost structures, through the elaboration of a system dynamics model. The findings confirm empirical research that indicates that in specific conditions of technological maturity, process development may lie outside the overall product launch critical path. Furthermore, the behaviour of the various indicators indicates that there are effects of non-linearity, which would not be visible if the effect of dynamic capabilities had not been taken into account.