Considerably less research is found on tolerance specifications compared to research on tolerance analysis and synthesis. Where tolerance analysis and synthesis often can be completely understood based on technical input we argue that an extended research approach is needed to understand tolerance specification complexity. We have aimed to understand the Research Question (RQ) "How does variation analysis support tolerance specification during collaborative Product Development (PD)"? For this case study of the Product Development Process (PDP) of a rocket motor within the defense industry we have used interviews, observations, participation and secondary sources during data gathering. We found that collaborative gathering of input for the simulation generates useful knowledge for the project at an early stage. Further, that swiftly and precisely done variation analysis generates output supporting frequent and cross functional communication on tolerances. We see the enabled fact based decision making as an important factor to PD success.