Concurrency and Disruption in New Product Innovation

The conclusions of this research and its foregoing investigations were described by a technical paper “The Sources of Disruption to Project Cost and Delivery Performance,” by Cochran E. B. Rowe A. J. , published in the Proceedings of the Sixth Annual Dept. of Defense Procurement Research Symposium, June 1977.

We are primarily concerned with the technological issues of the BART project. For discussion of the related social and political issues, see Zwerling Stephen , Mass Transit and the Politics of Technology: A Study of BART and the San Francisco Bay Area (New York: Praeger, 1974).

Elson Benjamin M. , “Controversy Still Clouds BART Program,” Aviation Week (21 October 1974), p. 62.

Plattner C. M. , “B-52 Equipped for SRAM Evaluation,” Aviation Week (9 December 1968), p. 53; and Brownlow Cecil , “SRAM Produced Below Cost Estimates,” Aviation Week (16 April 1973), p. 22.

Hodgetts Richard M. Wortman Max S. Jr. , “The Future of Alaska,” in Administrative Policy: Test and Cases in the Policy Sciences, (New York: Wiley, 1975), pp. 427–463.

“One Final Squabble,” Forbes (15 April 1977).

A comment made by Business Week, November 10, 1973, when the estimated cost had reached the level of $4.5 billion.

For earlier discussion of the concurrency matter, see Marschak Thomas Glennan Thomas K. Jr. Summers Robert , Strategy for R & D: Studies in the Microeconomics of Development, Springer-Verlag, 1967, especially Chapter 2. A number of other Rand Corporation studies further examine the matter and explore the possibilities of measuring the degree of advance in state of the art for specific types of product development. See, for example, “System Acquisition Strategies” by Perry Robert Smith Giles K. Harman Alvin J. Henrichsen Susan , Rand Report R-733-PR/ARPA, 6/71; and “Measuring Technological Change: Aircraft Turbine Engines” by Alexander Arthur J. Nelson J. R. , Rand Report R-1017-ARPA/PR, 6/72.

Additional references for the BART story are scattered throughout various issues of Aviation Week: June 30, 1969, p. 62; August 28, 1972, p. 36; September 4, 1972, p. 56; November 20, 1972, p. 22; November 27, 1972, p. 20; December 4, 1972, p. 16; February 19, 1973, p. 55; April 9, 1973, p. 18; April 9, 1973, p. 41; May 14, 1973, p. 22.

BART: A Study of Problems of Rail Transit,” Transcript of Proceedings of public hearings by the California Assembly Committee on Transportation, October 9, 1973.

Aviation Week (21 June 1971).

“BART's Response to Critics: ‘You're Right,’” San Francisco Examiner and Chronicle (22 January 1978), Section A, p. 7.

Appropriate articles on SRAM appear in Aviation Week on: January 27, 1969, p. 16; December 1, 1969, p. 47; June 21, 1971, p. 22; June 26, 1972, p. 136; August 14, 1972, p. 15; November 13, 1972, p. 16; April 16, 1973, p. 21; May 14, 1973, p. 20.

“The Hot Oil Rush in Arctic Alaska,” Fortune (April 1969).

Business Week (18 April 1970 and 11 July 1970).

“The Escalating War for Alaskan Oil,” Fortune (July 1972).

“Higher Cost Affirmed,” Pipeline and Gas Journal (December 1974).

Pipeline and Gas Journal (July 1974), p. 28.

Further refinement of this calculation does not change the broad economic conclusion. Taking pipeline volume at 1.2 million bbl/day, we may derive an estimate of $90 million/year for operating expenses from “The North Slope: Paradise Lost?” by O'Shea T. W. , Drexel Burnham & Co., April 19, 1976, page IV-6. Computing depreciation over twenty years for $7.7 billion construction cost plus $1.3 billion interest, and adding annual interest (9%) and property tax (2%) gives a basic annual cost of $1.03 billion to deliver 438 million bbl/year. This is $1.26/bbl — roughly twenty percent of the price of the oil delivered. Government tariff computations even more complex, and generally produce a higher charge per bbl.

“Submarine Fleet Urged for Alaskan Oil,” New York Times (12 December 1969), p. 65. Also reported by Seaports & Shpping (January 1970).

“A Methodology for Cost Factor Comparison and Prediction,” Harman A. J. assisted by Henrichsen S. , April 1970, Rand Corporation, Report RM-6269-ARPA.

Cochran E. B. , “New Concepts of the Learning Curve,” Journal of Industrial Engineering (July 1970); Cochran Rowe , op. cit.

See “System Acquisition Strategies,” op. cit.

Eltis E. M. Wilde G. L. , “The Rolls Royce RB-211 Turbo-Fan Engine,” Proceedings of the Institute of Mechanical Engineers (1974), pp. 37–74.