Definition:
Set-Based Design (SBD) is a practice that keeps requirements and design options flexible for as long as possible during the development process. Instead of choosing a single point solution upfront, SBD identifies and simultaneously explores multiple options, eliminating poorer choices over time.
Set-based design is not a new concept, Toyota called it set-based concurrent engineering, a term which explains how the set-based design process differs from traditional point-based design. In set-based design, teams engineer multiple options concurrently, eliminating options as they get more insight.
Teams tend to naturally practice point-based design, where it forces teams to commit to one design solution before thoroughly testing assumptions about the solution. Once they realise there is a problem, huge adjustment needs to be done to rectify which can add delay and cost.
With set-based design, team can continue weighing all possibilities until they gather enough data which helps them to narrow down options. Set-based design has built-in learning points – where the data learnt helps in taking decision and eliminate options. This enables a process where team actively select options with desired specifications filtering the design alternatives based on validated learning. If there is a high degree of innovation, variability or deadlines a set based design goes handy to achieve design efficiency, increasing flexibility in interface and design, modelling, simulating and prototyping. The only way to resolve the uncertainty is to test the design early and request integration regularly i.e at integration points. SBD provides an adaptive approach with a wider systems perspective, better economic choices and more adaptability to existing constraints.
Further Reading:
Book: Principles of Product Development Flow: Second Generation Lean Product Development by Don Reinertsen
https://www.scaledagileframework.com/set-based-design/