Gurgaon ✡️9711147426✨Call In girls Gurgaon Sector 51 escort service
Chaper 2 Preplanning.pdf
1. Product development and design . Effect of
company policy and competition on design; product
analysis; marketing aspect; functional aspect;
operational aspect; durability and dependability;
aesthetic aspect. Economic analysis; Profit and
competitiveness, standardization, simplification-
Preferred numbers, break-even value charts, the
economics of new design-production aspect. Effect
of plant layout and material handling.
Hari Dhakal
3. Product
Product- Any device or system that is designed and
produced for use by a customer.
Customer- Person who ultimately buys the product
Another person in your company who may use the
device you design
Think broadly about who the customer is (who does
the product affect)
Chief objective of product design - Satisfying the
customer(s)
4. New Product Design
• An organization frequently creates ideas of new
product.
• Ideas come from various sources like Marketing,
Sales, R&D, Customers, Competitors, Top
Management, Engineering, Production etc.
• Ideas of new product are generated when product
enters into decline stage of its lifecycle. (Or) in
other scenario‟s products are developed as market
pull or market push demands.
5. Why Study the Development and
Design Process?
Continuous need for new, cost effective, high
quality products
Today‟s products are complex and require a
team of people with different backgrounds to
take an idea from concept to market
~85% of problems with new products not
working as intended, taking too long to bring
to market, or costing too much are the result of
a poor design process
6. Measurement of the Design process
Product Quality – How good is the product
Product Cost – What is the manufacturing cost
Development Time – How quickly was the
product developed
Development Cost – How much was spent to
develop the product
Development Capability – can the team be
better able to develop future products
7. 3 Measures of design
Cost
Quality
Time
Duration may vary from 1 yr to 10yrs or greater
8. Design and Development Team
Marketing
Design
Mechanical
Electrical
Software
Industrial
Manufacturing
Operations
Warehouse
Supply Chain
9. Product Design and Development
Process
Phase 0: Planning – Begins with the strategy
and assessment of technology developments
and market objectives
Phase 1: Concept Development – Identify
target market, alternative product concepts
generated and evaluated
Phase 2: System-level Design – Definition of
the product and break-down into subsystems
and components
10. Phase 3: Detail Design – Complete specification
of the geometry, material, tolerances and
manufacturing details
Phase 4: Testing and Refinement – Prototype
evaluation and assembly testing. Utilizes
prototype tooling
Phase 5: Production Ramp-up – Completion of
production tools and process to implement
manufacturing process as well as train workforce.
Product Design and Development
Process
11. Development Steps
Step 1: Identify Needs
Two sources: the market (market-pull), or the development of a new
technology (technology push)
Step2: Plan for the Design Process
Planning involves simply deciding on how to allocate the company‟s
resources of people, money, time, and equipment to complete the design
tasks.
Step 3: Develop Engineering Specification
Goal is to completely understand the problem
Three steps:
1) Identify customers
2) Generate customer requirements
3) Develop engineering specifications
Step 4: Develop Concepts
Based on customer requirements and engineering specs.
Multiple concepts may be evaluated by comparing the concepts generated
to the specifications developed. Goal is to select the best concepts for
refinement into products.
12. Development Steps (cont)
Step 5: Develop Product
Starting a project with a single conceptual design in mind,
without concern for the earlier phases, is poor design practice
and leads to poor-quality products.
As products are developed, they are evaluated for
manufacture, assembly, behavior, and cost.
During each stage of the design process, we must be
able to communicate the information to others.
Communication with management/customers
(possibly during design reviews)
Make it understandable to the recipient.
13. Carefully consider the order of presentation:
Present the whole concept or assembly and explain its
function
Describe the major parts and how they relate to the
whole and its function
Tie the parts together into the whole
Be prepared with quality materials
Have good visual aids and written documentation
Follow an agenda
Be ready for questions beyond the material presented
Documents communicating the final design
Drawings (or computer data) of assemblies and details.
Written documentation to guide manufacture, assembly,
inspection, installation, maintenance, retirement, and quality
control.
14. Product Life Cycle
New product progresses through a sequence of
stages from
Introduction/Start up
Growth
Maturity
Decline
Is associated with changes in the marketing
situation, impacting the marketing strategy and
the marketing mix.
17. Marketing Aspect/Mix
The Marketing Plan section explains how
you‟re going to get your customers to buy
your products and/or services.
Marketing Mix (4 P’s)
Product and/or Services
Pricing Strategy
Place / Distribution Plan
Promotions and Advertising Plan
Managers can control these variables in order to best
satisfy customers need.
18. Marketing Plan
Products and/or Services
Focuses on the uniqueness of you product or
service.
How the customer will benefit from using the
products or services you‟re offering.
19. Marketing Plan
Products and/or Services
What are the features of your product or service?
Describe the physical attributes of your product
or service, and any other relevant features, such
as what it does, or how your product or service
differs from competitive products or services.
How will your product or service benefit the
customer?
Brainstorm as many benefits as possible to begin
with.
Choose to emphasize the benefits that your
targeted customers will most appreciate in your
marketing plan.
20. Products and/or Services
What is it that sets your product or service apart
from all the rest?
What is your Unique Selling Proposition
The message you want your customers to receive
about your product or service
Marketing Plan
21. Pricing Strategy
Portion of the marketing plan involves
determining how you will price your product or
service.
The price you charge has to be competitive but
still allow you to make a reasonable profit.
Set a “Reasonable price”.
There is a limit as to how much the consumer is
willing to pay.
Needs to take the customer threshold into account.
Marketing Plan
23. Marketing Plan
Pricing Strategy
New product Strategies
Market Penetration – the company initially sets
a low price for its product in order to enter the
market quickly that is to attract large number of
buyers and capture a large market share in the
process.
Market Skimming –the company initially sets
high prices to skim revenues layer by layer
from the market.
24. Marketing Plan
Pricing Strategy
Competitor-Based Pricing
Going-Rate pricing – Pricing as Competitor
price.
25. Marketing Plan
Pricing Strategy
Product-Mix Pricing Strategies
Product line pricing – Applicable to firms that develop
product lines rather than single products.
The firm may set different prices
for its product line depending on the feature assortment.
Optional-Product pricing – This approach offers to sell
optional or accessory products along with the main
product.
26. Marketing Plan
Pricing Strategy
Product-mix Pricing Strategies
Captive-product Pricing – Instead Of Offering Accessories
To The Main Product, Captive-product Pricing Would
Offer Products That Are Essential To The Main Product
Itself. Eg: Gillette Shaver with blades
By Product Pricing – A By Product Pricing Is A Surplus
Product Or Item Coming From The Main Product Itself.
Eg: iPhone for least price with commitment
of cellular usage for long period.
Product Bundle Pricing – A Company Combines Several
Of Its Products Into A Bundle And Offers The Bundle For
Sale At A Reduced Price.
27. Marketing Plan
Pricing Strategy
Price Adjustment Strategies
Segmented pricing
Product form pricing – is another strategy in
which different versions of a product or service
are priced differently, but not according to
differences in their costs.
For instance, an ordinary stand fan may be sold at
400.00. the same stand which has an added feature, like
timer that costs 120.00 to install may be sold at 1500.00
28. Marketing Plan
Place/Distribution Plan
The primary goal of the marketing plan is to get people to
buy your products or services. The Place/ Distribution
part of the marketing plan details how this is going to
happen.
Three parts to Place/Distribution section of the
marketing plan:
Outline the distribution methods to be used.
Outline the transaction process between your business and
your customers.
If it‟s applicable to your business, outline your distribution
strategy.
29. Marketing
Mix/Stages of
product life
cycle
Introduction Growth Maturity Decline
Product •Establish branding and
quality level
•Intellectual property
protection are obtained (e.g.
Patent, trademark etc)
•Quality is
maintained
•Features and
support
services may
be added
•Features
enhanced to
differentiate
the product
from
competitors
•Maintain
Product- by
adding new
features
•Harvest the
product- reduce
cost and
continue to
offer it
•Discontinue
the product –
generating new
concepts,
selling it to
other firm that
is willing to
continue the
product
Pricing •Low penetration pricing to
build market share
•High skim pricing to recover
development costs
•Maintained
as the firm
enjoys
increasing
demand
•May be lower
because of
new
competition
Place/Distribut
ion
•Selective until consumers
show acceptance of the
product
•More
channels are
added as
demand
increases
•Becomes
more
intensive
•Incentives
need to be
offered
Promotion •Aimed at innovators and
early adopters
Aimed at
broader
audience
Emphasizes
product
differentiation
31. Product analysis
Before selection and conversion of a product idea
into reality, management should carry out product
analysis to consider various factors in the domain of
production and industrial engineering.
Become familiar with the product
How does it work?
How does it perform functions?
What does it look like?
How much it should cost?
Product analysis enables us to find out the above
questions about the product.
33. Product analysis
Marketing Aspect
Product characteristics
Functional Aspect
Operational Aspect
Durability and Dependability Aspects
Aesthetic Aspect
Economic Analysis
Profit Consideration
Effect of Standardization, simplification and specialization
Break even analysis
Production Aspect
34. Marketing Aspect
Should satisfy a demand in the market.
Services offered are both desirable and
acceptable.
Demand in the market already exists or Not?
Demand can also be created with the
introduction of new product.
Market research is a useful tool to forecast
demand of such a new product.
35. Operational Aspect : It is related with the ease of
operation of the product.
It must be easy to handle and simple to operate.
Its operational efficiency should not be affected
by the varying operating conditions and varying
operator skills.
In many situations, operational efficiency of a
product can be improved by providing supporting
literature in the form of operation guidelines or by
providing on hand training to the first time users.
Product characteristics
36. Functional Aspect : The functional scope of the product
has to be carefully analysed and properly defined.
Functions can be divided into three main categories
viz., primary function, secondary functions, and
tertiary functions.
For a washing machine „to wash clothing' is the
primary function. Secondary and tertiary functions
may include: level of automation, rinsing or drying or
both, heating of water prior to washing etc.
Product characteristics
37. Aesthetic Aspects - Attractiveness of Product
How does the product appear and in what way does the
appearance of a product affect its design? These are the two
questions to be answered by the designer during product
design.
It could be a dominant feature in many products (such as
fashionable products, bike and Cars etc.). However, it is an
important feature in most of the products and should be given
due consideration.
Product aesthetic can be improved by:
use of special materials (i.e. plastics, wood, glass etc.)
use of colour (natural or artificial) with different composition and
contrast
use of texture supplement colours to give better appearance
use of functional shape of the product (i.e. a lamp should look like a
lamp)
use of lines to break form and to give a sense of continuity, scaling and
styling of the product, packaging of the product etc.
38. DURABILITY AND DEPENDABILITY
These two factors often determine quality of a product.
Durability is defined by the length of active life of
the product under given working conditions.
Dependability is the capability of the product to
function when called upon to do its job.
Both durability and dependability are related to the
selection of materials and the class of workmanship.
Durability of a product can be shown by a bath tub
curve(product durability curve).
Product characteristics
39. It can be observed that during infant stage, product is new and
may have some design or manufacturing defects leading to
higher rate of failure. During adult stage, product is put under
use after all necessary testing and thus the rate of failure is
stabilised and is fairly low. Similarly in wear out stage,
product has completed its useful life and due to wear and tear
in its components, failure rate starts increasing again.
Product Durability Curve
41. Economic Analysis
A systematic process for calculating and
comparing benefits and costs of a new product/
project for two purposes:
to determine if it is a sound investment
(justification/feasibility)
to see how it compares with alternate projects
(ranking/priority assignment)
42. Economic Basis
A project has economic value if it increases
prosperity and incomes too (is that all?)
This can happen in different ways
Increased output requires more resources (e.g., attracting
business)
Increased efficiency (lower cost of production)
Never measured but quite important – the reorganization of
production!
Too much investment wastes resources, too little
stifles the business and productivity.
Economic analysis doesn‟t include everything, but
pays much attention to important business decisions.
43. Types of Economic Analysis
Gross measures of Cash Flow
Return over the life span
[NPV (Net Present Value), IRR(Initial Rate of Return), Payback)
Loan disbursement capability
DSCR(Debt Service Coverage Ratio)
Risk evaluation in probability terms
Annual Measures of Performance
Fixed and Variable Costs
Break even analysis
Changes in demand, profitability
Optimal strategy evaluation
44. GROSS PERFORMANCE
MEASURES
Net Present Value
Payback period
Internal Rate of Return
Financial Ratios
Benefit /Cost Ratio
Debt Service Coverage Ratio
Stream of
Cash Flows
Investment
48. FIXED AND VARIABLES COSTS
Fixed Costs
Do not depend on production
volume
Costs which must be incurred
no matter whether we produce
or not
Rental or cost of land
Initial Machinery cost
Management & indirect
salaries
Warehouse, factory and
office space
Variable Costs
Directly depend on
production volumes,
such as
Raw materials
Utilities
Direct labour
Packaging cost
Shipment cost
49. BREAK EVEN ANALYSIS
Revenue = bV
Total Cost = F+aV
Loss
Profit
Breakeven point Volume of Sales
(BEP)
V1
Cost &
Revenue
At BEP, Revenue = Cost
bV1 = F+aV1
or, V1 = F/(b-a)
F – Fixed Cost
V – Volume of Sales
a- Unit variable cost
b- unit selling price
50. BREAK EVEN ANALYSIS
C-V-P (Cost Volume Profit Analysis) analysis
is an important tool in terms of short-term
planning and decision making.
It looks at the relationship between costs,
revenue, output levels and profit.
Short run decisions where C-V-P is used
include choice of sales mix, pricing policy etc.
51. MARGIN OF SAFETY
V1 V2
F
Revenue = bV
Cost = F+ aV
(BEP)
Margin of Safety=
(V2- V1)/V1 =
(V2/V1) - 1
Margin of safety-a measure in which the
budgeted volume of sales is compared with the
volume of sales required to break even.
52. Fundamentals of Simplification,
Standardization and Specialization
The concepts of simplification, standardization and
specialization (known as three S‟s) are closely
interrelated and lead to interchangeability.
These concepts can be effectively used in industry to
minimize unnecessary activity, reduce inventory
costs, simplify controls and improve product quality.
All these factors lead to higher efficiency in
production.
53. Simplification
Simplification is a process through which unnecessary
varieties and designs are eliminated and brought down
to a definite range.
Only a limited types of the product are retained.
Standardization
It is the second step after simplification.
Having selected the varieties and grades of the
products to be retained as much of its manufacturing
details are standardized as possible.
Since manufacturing involves a large number of
decisions from selection of raw material to the process
used for finishing, standardization of some of these
items reduce unnecessary repetition of work.
54. Use of standard components reduces inventory costs,
ensures interchangeability and makes future
maintenance easier.
It reduces component cost since standard components
are manufactured by mass production methods.
Selection of standard materials ensures physical
performance and guarantees failure-free operation.
The purpose of standardization is, therefore, on one
hand, efficiency and economy based on material
varieties, stock quantities and human effort therefore
reduction in cost and increase in turnover.
So Standardization covers the standards within the
given range and Simplification reduces the variety
of products to be produced and Specialization is
outcome of both.
55. Renard Series (Preferred Numbers)
According to the American Standards
Association, preferred numbers are “A series of
numbers selected to be used for a standardization
process in preference to other numbers.”
The process of standardization had two problems
earlier;
To define the number of terms in the series.
To determine the method by which these sizes
should be preferred to others.
56. MODULAR DESIGN
Products are typically designed and manufactured
in modules. This results in
Low cost of production
Greater product variety at low cost
A greater choice of subcontractors and vendors for
product manufacture
Control of product reliability and cost
57. AN EXAMPLE OF MODULAR
DESIGN
A B
For the product to function both A and B must function
If there are 3 designs for A
And 3 designs for B
There are a total of 3 X 3 =9 designs for the product
60. So what Modular design does?
It helps to increase variety, reduces cost with
optimal output.
61. Production and Operations Management – Buffa
Production and Operations Management –
Everette
Design and Manufacturing – A.K. Chitale
Product Design and Development - Ulrich
