NEW PRODUCT DESIGN/ PRODUCT

DEVELOPMENT PRCESS
Product: A product is anything that is capable of satisfying
A felt need. A new product is the one which is truly innovative
and is significantly different from other existing products.
The development of a new product passess through SEVEN
stages.
Needs Advance Advance
identification Product planning design

Detailed engineering
design

Prodn. Process
Product evaluation Product use
Design and
& improvement & support
development
1. Needs Identification:
Needs identification must be preceded by idea generation. New
product
Development starts with an idea. Idea emanates from
• Customers
•Top Management
• Staff of the marketing department
• Production deptt.
• Engineering section
2. Advance Product Planning or feasibility study:
At this stage conceptual design of the product shall emerge. For
Example the Conceptual design for a pen would articulate its
length, Weight, strength, shape, colour, retail price and so on.
in the market.
Concept design is finalised by the production and operation
Personnel, joining together.
It includes:
• preliminary market analysis ( sales projections)
•Crating alternative concepts for the product
•Clarifying operational requirements
•Establishing design criteria and their priorities
•Estimating logistics
•Distributing and maintaining the product

3. Advance Design
It involves detailed investigation by basic and applied researchers
Into technical feasibility and also identifying the trade-offs in
Product design.

4. Detailed Engineering Design

It involves a seroes pf emgomeeromg actovotoes tp develop a
Detailed definition of the product including its subsystems and
Components, materials, sizes and so on.
The engineering process involves analysis, experimentation and
Data collection to find design that meet several design objectives:
• design for function
• design for reliability
• design for maintained (economically maintained)
• design for safety
• design for producibility (produced at the intended cost & volum

9. Production Process Design and Development

In this stage it is not only plans for material acquisition, production
Warehousing, transportation and distribution but also it involves
Planning for other supporting systems such as controls, information
And human resources.

6. Production Evaluation & Improvement

After the product has been launched, it needs constant evaluation
And improvement.
7. Product use and Support
In this stage it considers support for consumers who use the
Product. Support system might
• Educate users on specific application of the product
• Provide warranty and repair services
• Distribute replacement parts or
• Upgrade the product with design improvements
Since every product passes through a life cycle and the life cycle
Can have a direct bearing on a company’s survival.
Product Life Cycle:
Product life cycle is the pattern of demand throughout the
Product’s life ( over time).
(similar patterns and stages can identified for the useful life
of a process)

The life cycle of a product consists of four stages:

• Introduction
• Growth
• Maturity and
• Decline

The life cycle curve shows all the above stages are shown below:
 Maturity

Decline
Growth
Demand/
Sales volume
(Rs.) Introduction

Profit

O loss
Time in Year

Fig. Characteristic of the Product Life Cycle

 Table: Characteristics of Stage in Product Life Cycle

Introduction Growth Maturity Decline

Characteristics Innovators Mass Mass Loyal
of Customers market market customers
Competition Litter, if any Increasing Intense Decreasing

Sales Low levels, Raid Slow, no Decline

Then rising growth annual
growth
Profits None Strong, Declining Low/none
then annually
At a peak
PROCESS DESIGN
Process design means the complete delineation and description
of specific steps in the production process and the linkages among
the steps that will enable the production system to produce
products of the desired quality, in the required quantity, at the
time, customers want them and at the budgeted cost.

Process design is necessary to manufacture new products.

Process planning is intense because-

• Business or market conditions change

• Technologically superior machines become available or
• As other changes occur
 Interrelationship of Product Design and Process
Design
Product Ideas

Feasibility Studies
Product Design Process Design

Advanced Product Planning Organising the process flows

Advance Design Relation of process design
Production Process Design to process flow
& Development Evaluating the process
Product Evaluation & design
Improvement
Product Use and Support
Continuous interaction

Produce and market new products

PRODUCT RELIABILITY

Product reliability as the probability that the product will

perform as intended for a prescribed lifetime under specified
operating conditions.

Reliability is the first, ahead of comfort, price, style and many

other product features.

Unreliability is reflected in the product’s failure rate. This is

shown in the following curve.
Reliability Engineering determines the least height (failure rate)
and greatest length (useful performance life) for each new product
based on
 Financial
 Technical and
 Consumer considerations

What reliability is required of each subcomponent to achieve the

overall product reliability ?

Which subcomponents should be used to most economically

meet this required reliability ?

The above two questions are quite relevant because often a final
product does not perform properly unless all of its subcomponents
function correctly.
Therefore, the reliabilities of individual subcomponents must
be greater than the reliability desired for the final product.

Product reliability is usually expressed in terms of a probability.

Once reliability has been achieved subcomponents can be selected
on the basis of economic considerations.

Failure
rate

Initial Useful performance life Wear-out failures

Use
failures
Fig. Product Failure curve
Process Technology/Manufacturing Process Technology
New Products are not physical realities until they are
manufactured.

Process Technology(PT):

PT refers to the equipment, people, and systems used to produce

a firm’s products and services

Process technology decisions relate to –

∀• Organizing the process flows,
∀• Appropriate product-process mix,
∀• To meet strategic requirements, and
∀• Evaluating automation and high technology process.
Types of Process Technology
Project
Technology

Job shop

Process
Technology Batch

Assembly line

Continuous
Manufacturing
Project Technology:
A process technology suitable for producing one-of-a-kind (unique)
products.
e.g. General construction company (Flat for the consumers),
Construction of bridges, roads, dams etc.

Since the products cannot be standardized the conversion process

must be flexible in its equipment capabilities, human skills, and
procedures.

Conversion Process features –

 Problem solving
 Teamwork and co-ordinated design and
 Production of unique products
Job shop Technology:
A process technology suitable for a variety of custom designed
products in small volumes.
(It is appropriate for manufacturers of small batches of many
different products)
e.g. Jobs done by a Printing Shop, Hospital, Machine shop,
furniture company etc.
Batch Technology:

A process technology suitable for a variety of products in varying

volumes.
For the batch facilities the system must be flexible for the
low-volume/high variety products but the higher volume products
can be process differently.
e.g. Producing some batches for stocking rather than for
customer order.
Assembly Line:
A process technology suitable for a narrow range of standardized
products in high volumes.
e.g. Laundry Appliances

Continuous Flow Technology:

A process technology suitable for producing a continuous flow of
products.
Material and products are produced in continuous, endless flow,
rather than in batches or discrete units.

 Products is highly standardised

 It affords high-volume, around the clock operation with
capital-intensive
 Specialised automation.
e.g. Postal Services, Telephone company, Oil Refinery etc.
So there are 36 (3x2x2x3) different computer systems from which
to choose.
The modular design concept gives consumers a range of product
options and and advantages in manufacturing and product design.

Now, rather than storing inventories of all 36 fininshed computer

systems, only some of which will be needed we insteasd store just
the subsystems or modules.
Thus, when a particular computer system is demanded the producer
can focus on quickly retrieving and assembling the appropriate
modules into the desired configuratios and avoid the high costs
of idle finished goods inventories.
• Material planning and inventory control can be simplified
PROCESS TECHNOLOGY LIFE CYCLE

Process technology life cycle are related product life cycles.

Over a period of time, manufacturing cost per unit diminishes in

mature products.

Product life cycle starts from the stage of ‘start up’ and ends in the
stage of ‘decline’.

The through-put volume, rates of process innovation and degree

of automation will change from the stage of start-up to the stage
of decline.

Through-put volumes and automation are low at start-up and

high during the maturity stage.
 Assembly line

Batch

Job Continuous
Manufacturing shop flow
Cost/unit

Time

Fig. Process Life Cycle

 Product – Process Mix

With changes in products, market requirements and competitions,

the equipments, processes and human resources also will change.

If the process changes are not carried out to accommodate process life
cycles, products and processes become incompatible, resulting in
competitive disadvantages.
 Product – Process Mix
Product Life Cycle stages

Process life 1.low volume 2. Rapid growth, 3. Maturity, few 4. Commodity,

Cycle stages & low low volume, major products, high volume, high
standardisation multiple products high volume standardisation of
products
1.Job shop Void
prodn. A

2. Batch
prodn. B

3. Assembly
line prodn. C

4. Continuous
Void D
flow prodn.

A – Commercial printer, B – Heavy machinery

Feasible zone C – Automobile assembly, D – Sugar Mill
 Process Technology Trends
Flexible Manufacturing Systems (FMS)

FMS is a computer controlled process technology suitable for

Producing a moderate variety of products in moderate volumes
With high quality.

e.g. once the machine has finished one batch, th computer signals
The next quantity or component and the machine automatically
Repositions and retools accordingly. Meanwhile the just-finished
Batch is automatically transferred to the next work station in its
Routing.
Characteristics of an FMS
• Produce a moderate variety of products in modest volumes with
high quality
• Reduces operating costs
• Lower direct labor costs
• Lower manufacturing costs

The benefits are not free. An FMS requires very large capital
Investments in equipment, planning and control systems and human
Resources.

An FMS is appropriate when:

13. All products are variation of a stable basic design
14. All products utilize the same family of components
15. The number of components is only moderate (10 to 50)
16. The volume of each component is moderate (1,000 to 30,000 units)
but in lot sizes as small as one unit
Goal of an FMS

The goal is to produce a moderate variety of products in moderate,

Flexible quantities.

An FMS is more flexible than conventional high-volume production

System but less flexible than a job shop that specialises in
one-of-a-kind products.
 Computer-integrated manufacturing functions

Physical Drafting Computer-aided

systems design
Database design
Mgmt. Computer-
Aided
Prodn. Manufacturing
Planning Engg. design
& control Group
Technology
Mgmt. Information Manufacturing Manufacturing
Information Mgmt. database Engg. Process
System Planning

Decision Factory Robotics

Support Prodn.
system

Automated Quality Robotics Distributed Routine

Material Assurance & machines numerical Manufacturing
Handling tools control
Computer – Integrated Manufacturing (CIM)

CIM is a computer information systems utilizing a shared

manufacturing database for engineering design, manufacturing,
engineering, factory production, and information management.

CIM centers around a shared database for four primary

manufacturing functions:
• Engineering design
• Manufacturing design
• Factory production and
• Information Management

The database stores all product and process related information

required to produce a component or product. It contains
information about machine, tools, materials, manufacturing
steps
quantities demanded, due dates and vendors.
Computer-Aided Design (CAD)
CAD is a computer software programs that allow a designer to carry out
Geometric transformations rapidly.

CAD uses computational and graphics software and has substantially

enhanced design productivity.

Alternative designs can be posed and evaluated more quickly.

Once a design is satisfactory it is stored in the database and can be

transmitted electronically to manufacturing engineering, production
and purchasing.

What does CAD accomplish ?

Drafting productivity improves by a factor of three or more and
Engineering lead time shrinks.
Computer-aided Manufacturing (CAM)

CAM is a manufacturing systems utilising computer software progra

That control of the actual machine on the shop floor.

The computer programs can be stored in the manufacturing databas

Retrieved, updated, and revised as components are added or redesign
And transmitted electronically in-house or externally by satellite to
other divisions and facilities.

Benefits of CAM
• More reliable than the skilled operator
• product quality is more consistent
• closer tolerance
• low labor cost
• less time is required
Too much CAM can be costly as suggested by Aerospace manufactur
Due to error in computer program.
Group Technology
GT is way of organising and using data for components that have
Similar properties and manufacturing requirements.

Characteristics such as Length, Diameter, type of material and

Density are recorded for each component in the manufacturing system.
The computer then sort for all similar components.
Design of Services and Service Processes
Today the idea is that everything sold falls somewhere on the
continuum or service/product dominance.

To be competitive organisation have to organise differences

in the product/service elements of their market offerings and
develop process technologies accordingly.

Design of Services
Design of services involves the same stages as the design of
Products.
Differences between Product and Service Design
Services that do not include a physical component do not require
the Engg., Testing, components analyses, the process technology
involves different issues and considerations than those of
products
 Nursing
Theater

Air-travel

Television Service dominant

entities

Product
Dominant Fast food shop Balanced entity
entities Equally weighted
Automobiles
Between product
House
And services
Dog food

Salt
Fig. Scale of service Vs. product dominance
Services Process Technologies
Process technologies for services are at least as diverse, and perhaps
More so, than product process technologies. Services vary in the
amount of customer contact and in the intensiveness of labor Vs.
Capital. Service process technologies vary accordingly.

Trends in Service Automation

Office automation (OA) is a computer based system for managing
information resources.
Word processing, generating reports, and handling data may all be
part of OA.
e.g. automated banking, electronic grocery scanners, and the like.
Value Engineering/ Value Analysis
It is one of the techniques of cost reduction and cost prevention.
It ensures the necessary function at minimum cost without
compromising on quality, reliability, performance and appearance.

The system which developed as a result of a project led by L.D.Miles

of the GEC of the U.S.in the year 1947, after five years of work and
an expenditure of $3 millions and which aimed at “finding the most
effective method of improving the value of the product” is known as
Value Analysis (VA).

e.g. use of asbestos required for flooring

In 1954, the US Navy Bureau of ships applied VA to cost improve-

ment during the design stage and termed it as Value Engineering (VE).
In India, the Indian Value Engineering Society (INVEST) was formed
in 1977. Now it is applied in both public and private sectors industries
in India.

When to apply Value Analysis ?

• Company’s product show decline in sales

• Company’s prices are higher than those of its competitors
• Raw material’s cost has gone up suddenly
• New designs are being introduced
• the cost of manufacturing is rising disproportionate to the volume
of production
• Rate of return on investment has a falling trend
• unable to meet its delivery commitments
Value Analyis Vs. Value Engineering

VA – VA is the application of a set of techniques to an existing product

With a view to improving its value. It is a remedial process.

VE – It is the application of exactly the same set of techniques to a new

Product at the design stage, project concept when no hardware exists
To ensure that bad features are not added. It is a preventive process.

Aims/Objectives:

• Simplify the product

• Use cheaper and netter materials
• Modify and improve product design
• use efficient processes.
• Reduce the product cost.
• Increase the utility of the product by economical means
• Save money or increase the profits
Value Engineering Procedure

The steps of VE are :

5. Blast (I) identify the product

(ii) collect relevant information
(iii) define different functions
8. Create (iv) Different alternatives
(v) critically evaluate the alternative
10. Refine (vi) develop the best alternative
(vii) Implement the best alternative

VE should be done with brain storming sessions

Principles of Brain Storming

1. A quality idea comes from quantity of ideas

1. Creative ideas emerge from unconventional thinking
2. Spontaneous evaluation of ideas affects imaginative thinking and
retards the flow of creative ideas.
4. Hitch-hiking on the ideas often lead to better ideas
5. Creeativity is a regenerative process and the recording of ideas as
they emerge help to generate more ideas
7. When ideas cease to flow, short diversions enable the mind to
rebound with new ideas

Advantages:
• It is a much faster cost reduction technique
• It is a less expensive technique
• It reduces prodn. Costs and adds value to sales income of the
product
Applications-
Machine tool industries, Auto industries, import substitutes etc.
Standardisation
Standardisation is the process of establishing standards or units of
Measure by which quality, quantity, value, performance etc. may be
Compared and measured.

Standardisation Procedure:
Steps-
9. With the help of market research, sales statistics etc. determine
what is tobe sold in future
11. Define a range of products
12. From the range of products, select the minimum variety of
components matching the range for manufacturing
An approach to standardisation necessitates the classification of
Materials and components
A system of classification and codification is necessary for the design
Of new products within the defined range.
Advantages of Standardisation:

• Fewer specifications
• Better quality products
• Increased margin of profit
• Easy availability of spares
• Minimum inventory cost
• Quantity discount are possible due to purchase of large volume of
materials

Applications-

• Finished products, e.g. cars and T.Vs.

• Sub assemblies and components e.g. automobile gearboxes
• Material e.g direct materials (plain carbon and alloy steels etc.)
• Production equipments e.g. machine tools, press, welding equipment
etc.
Make or Buy Decisions
A company can satisfy the customers wither by making the required
Products using the facilities which are available within the company
Or buying them from a subcontractor.
Criteria for Make or Buy
• Criteria for Make:
1. Finished product can be made cheaper by the firm than
outside suppliers
2. Finished product is being manufactured by the firm because
other firms are unable so meet the demand
3. For maintaining quality control etc.
• Criteria for Buy:
1. High investment is required
2. The company does not have facilities to make
3. Non-availability of skilled personnel
4. Patent or other legal barriers
5. Demand for the product is either temporary or seasonal
Approaches for Make or Buy Decisions

3. Cost analysis
4. Economic analysis
5. Break-even analyis

7. Cost Analysis
In this case cost of making a product and that of buying a product
Are calculated. Then, the alternative which involves the minimum cost
Is suggested for implementation.

12. Economic Analysis

Inventory models are considered for economic analysis of make or
Buy of a product. The inventory models are:
• Purchase Model
• Manufacturing Model
The formula for calculating Economic Order Quantity(EOQ) and
Total cost (TC) of each model are as follows:

Purchase Model Manufacturing Model

Q1 = √ (2C0D/Cc ) Q2 = √ [2SD/Cc(1-D/R)]

TC = DP + (DC0/ Q1) + (Q1x Cc)/2 TC = DP + (DS/ Q2 ) + Cc (R-D) Q2/2R

Where,
D – demand/year, P – Purchase price/unit
Cc – carrying cost/unit/year, C0 - Ordering cost/order

S – Setup cost/setup, R – Production rate (units/year)

Q1 – Economic Order Quantity, Q2 – Economic Production size
Break-even Analysis
For any organisation, for manufacturing a product it has to incur total
Cost. Total cost is comprise of fixed cost (FC) and variable cost (VC).
Fixed cost is independent of production volume(output) whereas,
The variable cost is a function of the production volume of the product.
Break-even Point – The point at which TC is equal to the TR or sales
Revenue. At this point there is no loss or gain to the organisation.
This is analysis is known as Break-even analysis.

BEP = FC / (Selling price per unit – Variable cost per unit)

Sales
Costs Profit
TC
B
A
VC
Loss FC

O C Unit of sales per period