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Product Development
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The objective of the product decision is to develop and implement a product strategy that meets the demands of the
marketplace with a competitive advantage
Product Decision
Scope of product development
team
Product Development System
Scope for design and engineering
teams
Evaluation Introduction Test Market
Functional Specifications
Design Review Product Specifications Customer Requirements
Ability Ideas
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The Design Process
1. Idea Generation
(Product Design)
2. Feasibility Study
(Performance Specifications)
3. Preliminary Design
(Prototype)
4. Final Design
(Final Design Specifications)
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The Product Design Process
Step 1 - Idea Development - Someone thinks of a need and a product/service design to satisfy it: customers, marketing, engineering, competitors, benchmarking, reverse engineering Step 2 - Product Screening - Every business needs a
formal/structured evaluation process: fit with facility and labor skills, size of market, contribution margin, break-even analysis, return on sales
Step 3 – Preliminary Design and Testing - Technical specifications are developed, prototypes built, testing starts
Step 4 – Final Design - Final design based on test results, facility, equipment, material, & labor skills defined, suppliers identified
Product Life Cycle
• Product life cycle stages
– Introduction – Growth
– Maturity – Decline
• Facility &
process
investment
depends on life cycle
Product stages
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Product Life-Cycle
Growth stage is when the new product satisfies the market
• Sales increase
• New competitors enter the market
• Price stability or decline to increase volume
• Consumer education
• Profits increase
• Promotion and manufacturing costs gain economies of scale
• Product quality increases
• New features
• New market segments and distribution channels are entered
Product Life-Cycle
Maturity stage is a long-lasting stage of a product that has gained consumer acceptance
• Slowdown in sales
• Many suppliers
• Substitute products
• Overcapacity leads to competition
• Increased promotion and R&D to support sales and profits
. 9
Product Life-Cycle
Decline stage is when sales decline or level off for an extended time, creating a weak
product
• Maintain the product
• Harvest the product
• Drop the product
Product Life Cycles
Negative cash flow
Introduction Growth Maturity Decline
Sales, cost, and cash flow
Cost of development and production
Cash flow
Net revenue (profit) Sales revenue
Loss
.
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Process Flow Structures
• Job Shop
• Batch Shop
• Assembly Line
• Continuous Flow
Continuum of Process Types
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Job Shop Production
• Manufacturing one or few quantity of
products designed and produced as per the specification of customers.
It is characterised by
1. High variety and low volume products.
2. Highly skilled operators
3. Large inventory of materials, tools,
Batch Production
• A form of manufacturing in which the job pass through the functional departments in lots or batches.
• It is characterised by the manufacture of limited number of products produced at regular intervals and stocked awaiting sales.
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Mass Production
• Manufacture of discrete parts or
assemblies using a continuous process are called Mass Production.
• very large volume of production.
• Standardisation of product and process sequence.
• 2. Dedicated special purpose machines
Continuous Production
• Production facilities are arranged as per the sequence of production operations from the first operations to the finished product. The items are made to flow
through the sequence of operations
through material handling devices such as conveyors, transfer devices, etc.
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Product
Variety High Moderate Low Very Low Equipment
flexibility High Moderate Low Very Low Low
Volume Moderate
Volume High Volume Product
Variety High Moderate Low Very Low Equipment
flexibility High Moderate Low Very Low Low
Volume Moderate
Volume High Volume
Job Shop
Batch
Repetitive assembly
Variety, Flexibility, & Volume
.
Process Flexibility
Jumbled Flow.
Process segments loosely linked.
Disconnected Line Flow/Jumbled Flow but a dominant flow exists.
JOB SHOP
(Commercial Printer, Architecture firm)
BATCH
(Heavy Equipment, Auto Repair)
FLOW SHOP
(Auto Assembly, Car lubrication shop)
CONTINUOUS FLOW
(Oil Refinery)
Product Variety
Low
Low Standardization One of a kind Low Volume Many Products
Few Major Products High volume
High Standardization Commodity Products Connected Line
Flow (assembly line)
Continuous, automated, rigid line flow.
Process segments tightly linked.
High Low
High
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Product-Process Matrix
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Product Liabilty
“Liability for Defective Products”
Products Liability
• Definition:
– Corporate liability for injuries or damages suffered by the user from defective products
• Applies to manufacturers, sellers and distributors of goods
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Product Liability – Defect Theories
Three types of defect theories can be used to prove a product liability case
Manufacturing defect.
Design defect.
Warning defect.
More than one theory might apply to same situation.
Product Liability – Manufacturing Defect
• Manufacturing defect occurs when a problem, mistake, etc. in the manufacturing process causes the product to be assembled improperly which can cause injury even if product used as intended.
• Example – product assembled incorrectly due to human or mechanical error.
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Product Liability – Design Defect
• Design defect happens when a
problem, mistake, etc. in the design of
the product causes the product to be
inherently defective which can result
in injury even if product used as
intended.
Product Liability – Warning Defect
• Warning defect is when an inadequate warning or lack of any warning results in injury that could have been avoided with proper warning even if product used as intended.
• Example – warnings on plastic bags;
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Strict Liability
Applies to a defective product only
• The injured person doesn’t have to prove that the defendant breached a duty to care.
• Anyone in the chain of distribution from the manufacturer to the distributer to the retailer can be held liable.
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Strict Product Liability
• Requirements for strict liability:
– Product is unreasonably dangerous when sold
– Plaintiff injured by use or consumption of product and defective condition is the proximate cause of injury.
Negligence
• There is no intention to harm but harm happened.
• Manufacturers have a duty to care by making safe products
• Consumers also have a duty of care and use products as directed.
• Negligence implies that there is an element of fault because the manufacturer breached his
