Not well documented to date, the design and development system of Toyota Motor Corporation contributes greatly to the firm's remarkably consistent growth in market share and its enviable profit per vehicle. This article, which extends the authors' previous study of the Toyota product development system, reports on further data collection in Japan and at the Toyota Technical Center in Michigan. Findings substantiate the authors' previous claims about the product development system and lead them to conclude that Toyota is in its approaches. Set-based concurrent engineering (SBCE) begins by broadly considering sets of possible solutions (in parallel and relatively independently) and gradually narrowing the set of possibilities to converge on a final solution. Gradually eliminating weaker solutions increases the likelihood of finding the best or better solutions. In this way, Toyota can move more quickly toward convergence and production than their traditional, point-based counterparts. The authors develop the SBCE idea by describing three principles that guide Toyota's decision making in design: (1) simultaneous mapping of the design space according to functional expertise, (2) integration by intersection of mutually acceptable functional refinements introduced by the design and manufacturing engineering groups, and (3) establishment of feasibility before commitment. The authors also present a conceptual framework tied to the Toyota development system and discuss why the SBCE principles lead to highly effective product development. Findings suggest that a change to a distributed, concurrent engineering environment should involve a corresponding change in design method to a set-based process. Product development organizations able to master and apply SBCE principles and Toyota's principles for integrating systems and cultivating organizational knowledge may be able to radically improve their design and development processes.
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