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PRODUCT DESIGN

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Product design is cross-functional, knowledge-intensive work that has become increasingly important in today's fast-paced, globally
competitive environment. It is a key strategic activity in many firms because new products contribute significantly to sales revenue. When
firms are able to develop distinctive products, they have opportunities to command premium pricing. Product design is a critical factor in
organizational success because it sets the characteristics, features, and performance of the service or good that consumers demand.
The objective of product design is to create a good or service with excellent functional utility and sales appeal at an acceptable cost and
within a reasonable time. The product should be produced using high-quality, low-cost materials and methods. It should be produced on
equipment that is or will be available when production begins. The resulting product should be competitive with or better than similar
products on the market in terms of quality, appearance, performance, service life, and price.

THE INCREASING IMPORTANCE

OF PRODUCT DESIGN
Product design is more important than ever because customers are demanding greater product variety and are switching more quickly
to products with state-of-the-art technology. The impacts of greater product variety and shorter product life cycles have a multiplicative
effect on the number of new products and derivative products that need to be designed. For example, just a few years ago, a firm may
have produced four different products and each product may have had a product life cycle of ten years. In this case, the firm must design
four new products every ten years. Today, in order to be competitive, this firm may produce eight different products with a life cycle of
only five years; this firm must introduce eight new products in five years. That represents sixteen new products in ten years or one
product every seven and one-half months. In this fast-paced environment, product design ceases to be an ad hoc, intermittent activity
and becomes a regular and routine action. For an organization, delays, problems, and confusion in product design shift from being an
annoyance to being life threatening.

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PRODUCT DESIGN AND SUPPLY

CHAIN MANAGEMENT
Product design can also be an important mechanism for coordinating the activities of key supply chain participants. As organizations
outsource the production of sub-assemblies and components, they also may be asking suppliers to participate in product design. As
they outsource design capabilities it is essential that they manage and coordinate the flow of information among the supply chain
participants. This can be especially important as firms outsource components to two or more suppliers. Now, there may be important
design interfaces among two, three, or more suppliers. These interfaces must be properly managed to ensure cost effective and timely
designs. Clearly, information and communication technologies become important parts of this effort.

PRODUCT DESIGN: A KEY

TO ORGANIZATIONAL SUCCESS
Product design is an essential activity for firms competing in a global environment. Product design drives organizational success
because it directly and significantly impacts nearly all of the critical determinants for success. Customers demand greater product variety
and are quick to shift to new, innovative, full-featured products. In addition, customers make purchase decisions based on a growing list
of factors that are affected by product design. Previously, customers made purchase decisions based primarily on product price and/or
quality. While these factors are still important, customers are adding other dimensions such as customizability, order-to-delivery time,
product safety, and ease and cost of maintenance. Environmental concerns are expanding to include impacts during production, during
the product's operating life, and at the end of its life (recycle-ability). In addition, customers demand greater protection from defective
products, which leads to lower product liability losses. Safer and longer lasting products lead to enhanced warrantee provision, which, in
turn, impact customer satisfaction and warrantee repair costs.
Programs and activities are being put in place so organizations can cope with these dimensions. Organizations are embracing
concepts such as mass customization, design for manufacturing and assembly, product disposal, quality function deployment, and
time-based competition. They are using technology such as rapid prototyping and computer-aided design to examine how products
function, how much they may cost to produce, and how they may impact the environment. Firms are searching for and implementing new
technologies to determine ways to design better products. They are examining legal and ethical issues in product design as well as the
impact of product design on the environment.

MASS CUSTOMIZATION
Mass customization is the low-cost, high-quality, large volume delivery of individually customized products. It is the ability to quickly
design and produce customized products on a large scale at a cost comparable to non-customized products. Customization, cost
effectiveness is the ability to produce highly differentiated products without increasing costs, significantly. Consumers expect to receive
customized products at close to mass-production prices. Customization volume effectiveness is the ability to increase product variety
without diminishing production volume. As markets become more and more segmented and aggregate demand remains constant or
increases, firms must continue to design and produce high volumes across the same fixed asset base. Customization responsiveness is
the ability to reduce the time required to deliver customized products and to reorganize design and production processes quickly in
response to customer requests. It would be counter-productive to pursue mass customization if a customized product takes too long to
produce. Speed in product design and production is an indispensable criterion for evaluating an organization's mass customization
capability.

DESIGN FOR MANUFACTURING

AND ASSEMBLY
Improving manufacturability is an important goal for product design. A systems approach to product design that was developed by two
researchers from England, Geoffrey Boothroyd and Peter Dewhurst, is called design for manufacturability and assembly (DFMA). It can
be a powerful tool to improve product quality and lower manufacturing cost. The approach focuses on manufacturing issues during
product design. DFMA is implemented through computer software that identifies designs concepts that would be easy to build by
focusing on the economic implications of design decisions. These decisions are critical even though design is a small part of the overall
cost of a product because design decisions fix 70 to 90 percent of the manufacturing costs. In application, DFMA has had some startling
successes. With the DFMA software, Texas Instruments reduced assembly time for an infrared sighting mechanism from 129 minutes to
20 minutes. IBM sliced assembly time for its printers from thirty minutes to three minutes.
Firms are recognizing that the concept behind DFMA can also be extended beyond cost control to design products that are easy to
service and maintain. To do this effectively, service and maintenance issues should be considered at the earliest stages of the design.
Also, firms will be required to examine disposal during product design as they become liable for recycling the products they make. It can
be easier to recycle products if those factors are part of the product design paradigm.

DISPOSAL AND PRODUCT DESIGN

Disposal is becoming an increasingly important part of product design. The European Union is taking the lead by requiring that most of
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an automobile is recycled by the year 2010. This requirement has a major impact on product design. The most obvious effect is to
change the notion that a consumer is the final owner for a product. With this approach, the product returns to the manufacturer to be
recycled and the recycling process should begin in product design. Vehicles should be designed so they can be disassembled and
recycled easily. The designers should avoid exotic materials that are difficulty to recycle. For example, parts that have plastic and metal
fused together should not be used in applications where they are difficult to separate. The designers should determine which parts will
be designed to be refurbished and reused, and which will be designed to be discarded, broken down, and recycled. All this should be
done without adding costs or reducing product quality.

QUALITY AND QUALITY

FUNCTION DEPLOYMENT
Product design shapes the product's quality. It defines the way that good and service functions. Quality has at least two components.
First, the product must be designed to function with a high probability of success, or reliability; that is, it will perform a specific function
without failure under given conditions. When product reliability increases, the firm can extend the product's warrantee without increasing
customer claims for repairs or returns. Warrantees for complex and expensive items such as appliances are important selling points for
customers. Second, quality improves when operating or performance characteristics improve even though reliability does not. The goals
of product design should be greater performance, greater reliability, and lower total production and operating costs. Quality and costs
should not be viewed as a trade-off because improvements in product and process technologies can enhance quality and lower costs.
Quality function deployment is being used by organizations to translate customer wants into working products. Sometimes referred to as
the house of quality, quality function deployment (QFD) is a set of planning and communication routines that focus and coordinate
actions and skills within an organization. The foundation of the house of quality is the belief that a product should be designed to reflect
customers' desires and tastes. The house of quality is a framework that provides the means for inter-functional planning and
communications. Through this framework, people facing different problems and responsibilities can discuss various design priorities.

PROTOTYPING
Engineering and operations combine to develop models of products called prototypes. These may be working models, models reduced
in scale, or mock-ups of the products. Where traditional prototype development often takes weeks or months, the technology for rapid
prototyping has become available. Some companies are using the same technology that creates virtual reality to develop threedimensional prototypes. Other firms employ lasers to make prototypes by solidifying plastic in only a few minutes; this process can
produce prototypes with complex shapes. Prototyping should increase customer satisfaction and improve design stability, product
effectiveness, and the predictability of final product cost and performance.

COMPUTER-AIDED DESIGN
Currently, business managers and engineers perceive computer-aided design (CAD) as a tool to assist engineers in designing goods.
CAD uses computer technology and a graphic display to represent physical shapes in the same way that engineering drawings have in
the past. It is used in the metalworking industry to display component parts, to illustrate size and shape, to show possible relationships to
other parts, and to indicate component deformation under specified loads. After the design has been completed, the engineer can
examine many different views or sections of the part and finally send it to a plotter to prepare drawings. This capability greatly reduces
engineering time and avoids routine mistakes made in analysis and drawing. It significantly increases productivity and reduces design
time, which allows faster delivery.
Applications of CAD systems are not limited to producing goods. While it's true that services do not have physical dimensions, the
equipment and facilities used to produce services do. For example, the service stalls in an automotive center or rooms in an emergency
medical center have physical characteristics that can be represented by the interactive graphics capabilities of a CAD system.

LEGAL AND ETHICAL ISSUES

IN PRODUCT DESIGN
What is the responsibility of an organization and its managers to see that the goods and services they produce do not harm consumers?
Legally, it is very clear that organizations are responsible for the design and safe use of their products. Consumers who believe they
have been damaged by a poorly designed good or service have legal recourse under both civil and criminal statutes. Often, however,
only the most serious and obvious offenses are settled in this way. More difficult ethical issues in product design result when the
evidence is not as clear. For example, what responsibilities does a power tool manufacturer have with respect to product safety? Does a
power saw manufacturer have the responsibility to design its product so that it is difficult for a child to operate? Suppose a parent is
using a power saw and is called away to the telephone for a few minutes. A ten-year old may wander over, press the trigger and be
seriously injured. Designing the saw so it has a simple and inexpensive lockout switch that would have to be pressed simultaneously
when the trigger is pressed would make it more difficult for the accident to happen. What is the responsibility of the parent? What is the
responsibility of the company?

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PRODUCT DESIGN
AND THE ENVIRONMENT
Organizations consider product design a critical activity to the production of environmentally friendly products. Organizations increasingly
recognize that being good corporate citizens increases sales. Fast-food restaurants have begun recycling programs and redesigned
packaging materials and systems in response to customer concerns. In other cases, being a good corporate citizen and protecting a
company's renewable resources go well together; there are win-win opportunities where an organization can actually design products
and processes that cut costs and increase profits by recapturing pollutants and reducing solid waste.

OVERVIEW OF PRODUCT
DESIGN PROCESS
Product design time can be reduced by using a team approach and the early involvement of key participants including marketing,
research and development, engineering, operations, and suppliers. Early involvement is an approach to managing people and
processes. It involves an upstream investment in time that facilitates the identification and solution of down-stream problems that would
otherwise increase product design and production costs, decrease quality, and delay product introduction.
Time-based competitors are discovering that reducing product design time improves the productivity of product design teams. To
reduce time, firms are reorganizing product design from an "over-the-wall" process to a team-based concurrent process. Over-the-wall
means to proceed sequentially with the limited exchange of information and ideas. When this approach is used, problems are often
discovered late because late-stage participants are excluded from decisions made early in the process. As a result, poor decisions are
often made.
Product design is a labor-intensive process that requires the contribution of highly trained specialists. By using teams of specialists,
communications are enhanced, wait time between decisions is reduced, and productivity is improved. Participants in this team-based
process make better decisions faster because they are building a shared knowledge base that enhances learning and eases decisionmaking. By sharing development activities, design decisions that involve interdependencies between functional specialists can be made
more quickly and more effectively. This reorganized process creates a timely response to customer needs, a more cost-effective
product design process, and higher-quality products at an affordable price.
There are several reasons why early involvement and concurrent activities bring about these improvements. First, product design shifts
from sequential, with feedback loops that occur whenever a problem is encountered, to concurrent, where problems are recognized early
and resolved. The ability to overlap activities reduces product design time. Second, when a team of functional specialists works
concurrently on product design, the participants learn from each other and their knowledge base expands. People are better able to
anticipate conflicts and can more easily arrive at solutions. As a result, the time it takes to complete an activity should decline. Third,
fewer changes later in the process results in faster and less expensive product design. When problems are discovered late, they take
more time and money to solve.
Product design requires the expertise and decision-making skills of all parts of the organization. Marketing, engineering, operations,
finance, accounting, and information systems all have important roles. Marketing's role is to evaluate consumer needs, determine
potential impact of competitive pressure, and measure the external environment. Engineering's role is to shape the product through
design, determine the process by which the product will be made, and consider the interface between the product and the people.
Operations' role is to ensure that the product can be produced in full-scale production. Finance's role is to develop plans for raising the
capital to support the product in full-scale production and to assist in the evaluation of the product's profit potential. Accounting and
information systems provide access to information for decision making. Cross-functional teamwork and knowledge sharing are thus
keys to success.

SEE ALSO: Computer-Aided Design and Manufacturing ; Pricing Policy and Strategy ; Product Life Cycle and Industry Life Cycle ;
Product-Process Matrix ; Quality and Total Quality Management ; Reverse Supply Chain Logistics ; Supply Chain Management

Mark Vonderembse

FURTHER READING:
Corswant, F, and C. Tunlv. "Coordinating Customers and Proactive Suppliers: A Case Study of Supplier Collaboration in Product
Development." Journal of Engineering and Technology Management 19, no. 3-4 (2002): 249261.
Droge, C., J. Jayaram, and S. Vickery. "The Ability to Minimize the Timing of New Product Development and Introduction: An
Examination of Antecedent Factors in the North American Automobile Supplier Industry." Journal of Product Innovation Management
17 (2000): 2440.
Gerwin, D., and N.J. Barrowman. "An Evaluation of Research on Integrated Product Development." Management Science 48, no. 7
(2002): 938953.
Hong, S.K., and M.J. Schniederjans. "Balancing Concurrent Engineering Environmental Factors for Improved Product Development
Performance." International Journal of Production Research 38, no. 8 (2000): 17791800.
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Koufteros, X.A., M. Vonderembse, and J. Jayaram. "Internal and External Integration for Product Development: The Contingency Effects
of Uncertainty, Equivocality, and Platform Strategy." Decisions Sciences 36, no. 1 (2005): 977133.
Koufteros, X.A., M. Vonderembse, and W. Doll. "Concurrent Engineering and Its Consequences." Journal of Operations Management
19 (2001): 97115.
Krishnan, V., and K.T. Ulrich. "Product Development Decisions: A Review of the Literature." Management Science 47, no. 1 (2001): 1
21.
McDermott, C.M., and G.C. O'Connor. "Managing Radical Innovation: An Overview of Emergent Strategy Issues." Journal of Product
Innovation Management 19, no. 6 (2002): 424438.
Meyer, M.H., and A.P. Lehnerd. The Power of Product Platforms. New York: The Free Press.
Reinertsen, D.G. Managing the Design Factory. New York: The Free Press.
Song, X. M., and M. Montoya-Weiss. "The Effect of Perceived Technological Uncertainty on Japanese New Product Development."
Academy of Management Journal 44 (2001): 6180.
Tu, Q., M. Vonderembse, and T.S. Ragu-Nathan. "The Impact of Time-Based Manufacturing Practices on Mass Customization and
Value to Customer." Journal of Operations Management 19 (2001): 201217.
Vonderembse, M.A., and G.P. White. Operations Management: Concepts, Methods, and Strategies. Danvers, MA: John Wiley & Sons,
2004.

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 Product-Process Matrix

Product Life Cycle and Industry Life Cycle

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