The impact of virtual simulation tools on problem-solving and new product development organization

New product development nowadays makes heavy use of IT instruments such as virtual simulation tools. The main motivation for introducing virtual simulation tools in new product development is to speed up development and lower its cost. Virtual simulation tools, however, do much more. They introduce profound changes in the organization, including the nature of problem-solving, bearing the potential to increase new product development performance beyond cost and lead time reduction. Understanding these profound changes, we argue, holds the key to unlocking the potential of virtual simulation tools for improving new product development performance, including more innovative products. We support our argument with a case study from the European auto industry.