Concurrent and collaborative methodologies were introduced in the development of MPEG2 image compression LSI, which conforms to the international standard MPEG2, and a shortening of turnaround time (TAT) for device development is realized. The five elements of concurrent engineering, i.e., (1) front loading, (2) early sourcing, (3) parallel approach, (4) shortening, and (5) group work, are applied to the top‐down design flow in the design process and to the development and operation of a computer‐integrated manufacturing (CIM) system. A reduction in time of about 20% is attained from concept development to the development and operation of the system. The LSI developed by short TAT was expeditiously introduced into both a real time encoding system on a PC board and a multichannel MPEG2‐over‐ATM encoding system in NTT's “Joint Utilization Test for Multimedia Communication.” © 1999 Scripta Technica, Syst Comp Jpn, 30(7): 79–91, 1999