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PRODUCT DESIGN - January 15th, 2007

Meaning
Product Design can be defined as the idea generation, concept development, testing and manufacturing or implementation of a physical object or service. It covers more that the discipline name - Industrial Design. Product Designers conceptualize and evaluate ideas, making them tangible through products in a more systematic approach. The role of a product designer encompasses many characteristics of the marketing manager, Product management, industrial designer and design engineer. The title name of Industrial designer has in many cases fallen into the category of an art. The role of product designer combines art, science and commerce for tangible non-perishable items. This evolving role has been facilities by digital tools that allow designers to communicate, visualize and analyze ideas in a way that would have taken greater manpower in the past.
As with most of the design fields the idea for the design of a product arises from a need and has a use. It follows certain method and can sometimes be attributed to more complex factors such as association and Telesis.
Aesthetics is considered important in Product Design but designers also deal with important aspects including technology, ergonomics, usability, human factors and material technology.
Product designers are equipped with the skills needed to bring products from conception to market. They should also have the ability to manage design projects, and subcontract areas to other sectors of the design industry.
Product Development
Akio Morita, the chairman of Sony Corporation in Japan, wanted a radio he could carry with him and listen to wherever he went. From that small desire was born the Sony Walkman, a radio small enough to be worn on a belt or carried in a pocket. With a headset smaller than earmuffs, the Walkman can be worn and listened to anywhere.
Not all product development is so easy. Most of today's products (including many of the basic necessities of food, clothing, and shelter) are the result of creative research and thinking by staffs of people. A new product is one that is new for the company that makes it. A hamburger is not new, but when McDonald's introduced the Big Mac, it was a new product for that company.
Decisions to make a new product may be the result of technology and scientific discovery. The discovery can be accidental or sought for. The original punch-card data-processing machine was devised for use by the Bureau of the Census. Penicillin, by contrast, was an accidental discovery and is now one of the most useful antibiotics. Products today are often the result of extensive marketing research to learn what consumers and retailers want. Ideas for products may come from consumers, salespeople, engineers, competitors, trade associations, advertising agencies, or any number of other sources.
Once a product has been approved, it must be designed, made, tested, revised, and retested. It may be subject to test marketing (sold or given away in a few places) before being put on the market generally. This whole process may take several years.
Package design and brand-name selection are two major aspects of product planning. Packaging not only contains and protects a product, but also provides a form of advertising intended to appeal to consumers by its appearance or convenience. Carbonated beverages could be sold in colorless glass jugs, but they are far more appealing and convenient in colorful six-packs of aluminum cans. Packaging also can add significantly to the cost of a product.
The packaging of many products is regulated by governments. In the United States the Federal Fair Packaging and Labeling Act of 1966 requires certain information to be placed on cartons, boxes, and other packaging for products used by consumers. Nutrition information, for instance, is required on cereal boxes. Most packaging today carries a universal product code stamped on it. The code can be read by electronic scanners to speed up the buying process and to automate inventory control.
Nearly every product carries a brand name, often used in conjunction with a company symbol, to identify it for consumers and to aid in advertising. The goal of a company is to build brand loyalty in consumers and to enhance its reputation.
There are two major types of brand names: manufacturer brands and dealer brands. The manufacturer brand is given by the maker of the product, such as Ford Escort automobiles or Gillette Trac-II razor blades. A dealer brand may be given by a middleman or a retail store. Sears, Roebuck and Company, for example, has given the brand name Kenmore to its appliances, though they are not manufactured by Sears. Grocery chains often give brand names to items specially packaged for them. Brand names, like trademarks, can be protected by law (see Trademark).

Classes of Consumer Products
The traditional distinction between products that satisfy needs and those that satisfy wants is no longer adequate to describe classes of products. In today's prosperous societies the distinction has become blurred because so many wants have been turned into needs. A writer, for instance, can work with paper and pencils. These are legitimate needs for the task. But the work can be done more quickly and efficiently with a word processor. Thus a computer is soon viewed as a need rather than a want.

In the field of marketing, consumer goods are classed according to the way in which they are purchased. The two main categories are convenience goods and shopping goods. Two lesser types are specialty goods and unsought goods. It must be emphasized that all of these types are based on the way shoppers think about products, not on the nature of the products themselves. What is regarded as a convenience item in France (wine, for example) may be a specialty good in the United States.
People do not spend a great deal of time shopping for such convenience items as groceries, newspapers, toothpaste, razor blades, aspirin, and candy. The buying of convenience goods may be done routinely, as some families buy groceries once a week. Such regularly purchased items are called staples. Sometimes convenience products are bought on impulse: someone has a sudden desire for an ice cream sundae on a hot day. Or they may be purchased as emergency items: the car battery dies just as the family is about to leave for vacation; to avoid delay, a new battery must be bought and installed.
Shopping goods fall into two classes: those that are perceived as basically the same and those that are regarded as different. Items that are looked upon as basically the same include such things as home appliances, television sets, and automobiles. Having decided on the model desired, the customer is primarily interested in getting the item at the most favorable price. Items regarded as inherently different include clothing, furniture, and dishes. Quality, style, and fashion will either take precedence over price, or they will not matter at all.
Specialty goods have characteristics that impel customers to make special efforts to find them. Price may be no consideration at all. Specialty goods can include almost any kind of product—particular types of unusual food; an expensive imported car; an item from a well-known store, such as Gucci or Tiffany; or a dinner at a new restaurant. Normally, specialty goods have a brand name or other distinguishing characteristic.
Unsought goods are items a consumer does not necessarily want or need or may not even know about. Promotion or advertising brings such goods to the consumer's attention. The product could be something new on the market—as the Sony Walkman once was—or it may be a fairly standard service, such as life insurance, for which most people will usually not bother shopping.







PRODUCT LIFE CYCLE

How long a product life cycle takes and the length of each stage varies across products? A cycle could vary anywhere from 90 days, to 100 years or more.

Sales and profits do not move together over time.
Summary: The product life cycle is the cycle of a product from the introduction of it into the market to the decline or removal of that product from the market. Each stage is very important to the product. In order for the product to be sold it must move from one stage to the other. Product life cycle is also very important for marketers so they can determine how to advertise and market the product. Total sales of the product in the industry vary in each of the five stages. They move from zero in the development stage, low in the introductory stage, high in the market maturity stage, and then back to low in the sales decline stage. The stages are as follows:
Introduction: In the introduction stage, sales tend to be low because of the new idea or product being introduced into the markets. Customers aren't even looking for the product yet and may not be aware of its benefits or advantages over their current brands. Promotion is needed to aware potential customers about the new product. Money is invested in developing the market in the anticipation of future profits
Growth: In the growth stage, the industry sales tend to grow very rapidly. The industry profits begin to rise and then start to fall. As more customers buy the product the innovator begins to make a profit. Competitors may see this opportunity and enter the market to provide competition. Some companies may copy the successful product or they may try to improve the product in order to compete with the company. Other companies may try to make their products more appealing to some target markets. All of the new entries result in more product variety. In this stage the profits are the largest. Also in this stage the industry profits begin to decline because of the increased competition that this new product creates.

Maturity: This stage occurs when the industry sales level off. The competition is more aggressive as competitors have entered the market for profits. The industry profits continue to decrease during the maturity because the promotion costs rise and competitors are continuing to cut their prices to attract more business. New firms still enter the market at this stage. Because of the late entry these firms skip the early life cycle stages, including the profitable growth stage. These new firms must now try to take market share from the more established firms. This can be a very difficult and expensive in a very saturated, flat market. Customers who are satisfied with their current products will also not be interested in switching to an unknown brand. An example of the maturity stage in the United States is the market for cars, boats, television sets, and most household appliances. These products may continue to be in the maturity stage for many years until a new product idea is developed and makes the old product obsolete.
Decline: During the sales decline stage the new products are replacing the old products. The competition from the declining products becomes more energetic. Firms with strong brands may make profits until the end of the sales decline because they have successfully differentiated their products from the others. Firms may also keep some sales by appealing to their loyal customers or those who may be slow to try the new ideas. These customers may switch later which will smooth the sales decline







Product Life Cycle Length

Sales and profits do not move together over time. Sales of some products are influenced by fashion (the currently accepted or popular style).
Shorter life cycles mean that firms must constantly develop new products to stay in business. They must also offer marketing mixes that make the most of the Market Growth Stage, when profits are the highest.
Industry profits decline while industry sales are still rising.
Market Specific Product Life Cycles
Product life cycle can not describe a product class (gasoline-powered automobiles),
A product form (station wagons) or a brand (Ford Taurus). The product life cycle is generally used to describe industry sales and profits for a product idea within a particular market.
Sales and profits of an individual product, model, or brand may not and sometimes do not follow the life-cycle pattern.
They can vary up and down through the life cycle and sometimes move in the opposite direction of industry sales and profits. A product idea may also be in a different life-cycle stage in many different markets.
For example a firm could introduce or withdraw a specific product during any stage of the industry product life cycle. A "me-too" brand introduced during the market growth stage may never get any sales and suffer a quick death. Or, the product could reach its peak and start to decline before the market even reaches the maturity stage.
Sometimes market leaders enjoy high profits during the maturity stage, even though the industry profits are declining. In some cases the innovator brand could lose so much money in the introduction stage that is has to drop out just as the others are beginning to receive profits in the market growth stage.
How they see product life cycles depends on how broadly they define the market. About 80% of all U.S. households own microwaves, which leads to the conclusion that they are in the maturity stage. In some countries microwaves are still in the early growth stage. For example, in 1994, microwaves were in less than 15% of homes in Switzerland. U.S. microwave manufacturers can extend their distribution to off shore markets and expand their product life cycles.
Product life cycles also vary on how they define the needs of customers in a product market and who the competitors are. For example consider the needs to store and prepare foods. Wax paper sales in the U.S. started to decline when Saran Wrap was introduced. In the early 1970's sales of Saran Wrap, and related products began to decline sharply when plastic storage bags were introduced and became popular. Sales increased by the end of the decade. The product didn't change but the needs of the consumer did because as microwaves became more popular consumers realized that saran wrap worked very well in microwave cooking.
If a market is defined too broadly there may be many competitors and the market may appear to be in the maturity stage. However, if the focus is on a narrower sub-market, and a particular way of satisfying consumer’s needs, then they could observe much shorter life cycles as new product ideas replace the old product ideas.




















PRODUCT DEVELOPMENT STAGES

Development: activities that turn a specific set of technologies into detailed designs and processes.
Designs for products are developed using both marketability and ease of production.
Studies have shown that ideas for development have begun with the recognition of the market and production needs and not from new technological opportunities.
There are seven stages of new product development.
1. Generating Ideas
2. Screening Ideas
3. Developing and Testing Ideas
4. Conducting a Business Analysis
5. Product Development
6. Test Market
7. Commercialization

Generating Ideas

• When generating ideas you should start by brainstorming ideas and ask questions about what you want to achieve
• Consider products that will fit the company
• Creativity is a key point
• Review the customers suggestions


Screening Ideas

• When screening ideas you should start by looking at the grand scheme of the development process.
• Then begin to narrow ideas
• In order to move into development and testing the idea must meet different criteria
• Does the product fit the overall mission of the company?



Developing and Testing Concepts
• The company must ask these questions: Why would a customer buy this product? What would be the benefit ?, How might this product be used ?
• Test the usefulness of the new product idea with customers and have an
Conducting Business Analysis
• There should be an analysis on the costs, return of investment, cash flow, fixed cost, and variable cost in the long run
• Studies have shown that high risk ideas provide the most successful new products
New Product Development
• In this stage your concepts begin to come together
• Develop prototypes
• Assign names and brand identity to the new product.
• Formulate marketing mix
• It is critical for research and development, engineering, packaging and marketing to use teamwork

Test Marketing
• Test marketing can be very time consuming, expensive and prone to competitive sabotage
• Companies must plan carefully during this stage.
Commercialization
• Companies need to remember to start small
• They must also plan for a modest product turnout
• Companies should also consult with other people who have gone through similar processes
These stages are not the same for every company
How to Improve Product Design
• Establish multifunctional design teams
• Concurrent design teams rather than sequential
• Create a design for manufacturing and assembly
• Create a design that is environmentally safe
Measures of Design Quality
• Calculate the number of parts and options
• Calculate the percentage of standard products
• Use existing manufacturers
• Calculate first run costs
• Calculate total product cost and product sale
• Calculate first year cost of service and repair
• Calculate cost of engineering during the first six months


An example of development is using a restaurant. The core products of a restaurant are food and drink. The marginal products are tables, chairs, and silverware. Services of a restaurant include courtesy, speed, quality, and less tangible characteristics such as taste, atmosphere, perceptions of status, comfort, and a sense of well being. So when developing customer benefit package for the Olive Garden, General Mills opened its sample facility in a failed steakhouse in Orlando, FL, in 1982. They researched 1000 restaurants for recipes, held 5000 interviews with consumers, and cooked more than 80 pots of spaghetti sauce. So, when General Mills started the process design phase they developed videotapes of how each job was done in order to train the new employees, they even created the singing waiters lyrics.
Another example of the development stage is The Swiss watch consortium, (SSIH) has dominated the world market for many years. In the 1970's they began to loose market share so they developed quartz movements in the hope that it would allow them to re-enter the market. The company held back their new technology and their competitors who were much smaller and had fewer resources outmaneuvered SSIH. Seiko, a competitor, made a daring decision to substitute the quartz watch for its existing mechanical watches. Because SSIH didn't introduce the quartz watch first they lost large amounts of market share and eventually went under.
Products are initially conceptualized to provide a particular capability and meet identified performance objectives and specifications. Given these specifications, a product can be designed in many different ways. The designer's objective must be to optimize the product design with the production system. A company's production system includes its suppliers, material handling systems, manufacturing processes, labor force capabilities and distribution systems.
Generally, the designer works within the context of an existing production system that can only be modified minimally. However in some cases, the production system will be designed or redesigned in conjunction with the design of the product. When design engineers and manufacturing engineers work together to design and rationalize both the product and production, it is known as integrated product and process design. The designer's consideration of design for manufacturability, cost, reliability and maintainability is the starting point for integrated product development.
A designer's primary objective is to design a functioning product within given economic and time constraints. However, research has shown that decisions made during the design period determine 70% of the product's costs while decisions made during production only account for 20% of the product's costs. Further, decisions made in the first 5% of product design could determine the vast majority of the product's cost, quality and manufacturability characteristics.
























OVERVIEW OF PRODUCT AND PROCESS DESIGN

Product design begins with the prototypes of the product features. They may be built, tested and analyzed. Detailed design goes beyond engineering, with operations, and marketing, getting involved in assessing the design towards manufacturability, and marketability. Product characteristics are thought over with lists of specifications, formulas, and drawings.
Product designs change often and require changes in methods, materials, or specifications and they can decrease the defect rates. Change can increase the risk of making mistakes so; stable product and service designs can help reduce internal quality problems. Changes to designs have the potential to increase the market share. Final decisions are made with regard to the inputs, operations, work flows, and methods which are use to make the product.
Process design that is used to produce a product or service is greatly affected by quality. The key to obtaining high quality in process design is concurrent engineering. Concurrent engineering is where operations managers and designers work closely together in the beginning phases of product and service design to ensure that production requirements and process capabilities are efficient.
Another dimension of quality related to product design is reliability. Reliability refers to the probability that the product will be functional when used. Some products can be designed with extra components so that if one component fails another one may be activated.
An example of product and process design is the alterations made to U.S. automobiles that are sold in foreign countries. Such alterations include switching the steering column to the right side. To accommodate left handed operations such as windshield wipers and turn signals, the manufacturers must reverse the positioning of these controls. These changes are a part of the alterations needed to accommodate foreign standards for traffic safety. This example is just one way manufacturers keep in mind the detailed process of product design and how important it is to adjust designs in changing environments.









Concurrent Engineering
What is concurrent Engineering?
Concurrent Engineering is a systematic approach to the integrated, concurrent design of products and their related processes, including manufacturing and support. Concurrent engineering forces the developer to consider the elements of the product life cycle from start to finish. This includes quality control, cost, scheduling, and user requirements.
Concurrent engineering brings together design engineers, manufacturing engineers, buyers, quality specialists, and information technology specialists. They form cross-functional teams that are responsible for implementing new technology. The teams fill the gaps between research and development and between development and manufacturing. Concurrent engineering shortens the time to market and allows the firm to meet time-based deadlines and quality competition better. The teams take a broad, systematic outlook in choosing technologies to pursue.
The basic tenet of concurrent engineering is the mixing of processors, human beings, tools, and methods to support product development. Concurrent engineering includes aspects from object-oriented programming, constraint programming, visual programming, knowledge-based systems, hypermedia, database management systems, and CAD/CAM.
Concurrent engineering involves the interaction of diverse group of individuals who are scattered over a wide geographic range. There are certain technological concepts to enable effective and complete communication among the groups that must also become organized into concurrent layers. To maintain or exceed the current level of software development productivity distributed information sharing and collaborative/cooperative work are important. Concurrent engineering takes advantage of shared information and allows simultaneous focus on different phases of the software development life cycle. Many existing World Wide Web (WWW) capabilities could support a wide area concurrent engineering environment.
There must exsist a strong level of communication between the developers and end-users for a concurrent engineering approach to be effective. A customer is both internal and external to the development process in the context of concurrent engineering. Each member of the concurrent engineering staff is an internal customer for intermediate products during development. Errors are detected prior to being implemented in the product by paying attention to all aspects of the design at each phase. A strong information sharing system, an iterative process of redesigns and modifications, trade-off analysis for design optimization, and documentation of all parts of the design that integrated design process must include.
Some Benefits of Concurrent Engineering
• Budget...With good communication and teamwork, there is little, if any, price change
• Quick to Market...Enabling tools to be completed faster than normal, your products get to market and contribute to the bottom line faster
• Workflow...Careful project planning encompasses communication of information exchange.

Design for Manufacturability
People often think of "design" as relating only to the finished product. Things like:
• What does it do?
• How heavy is it?
• What does it look like?
• What does it do?
• How heavy is it?
• What does it look like?
• Who will buy it?
• How much will they pay?

But "design" also influences and refers to issues regarding what technology or methods will be used to assemble it:
• Is the layout simple and straight-forward?
• Can it be built on automated equipment?
• Are the components and/or materials rare or plentiful, reliable or prone to failure, expensive or reasonable?
• Can it be tested during the manufacturing process?
The items that can be addressed in Design for Manufacturability include:
• General board size and configuration
• Placement area shape, size and orientation
• Component package style
• Component orientation
• Component clearance
• Media that the components come in
In the past, products have been designed that could not be produced. Some products have been released for production that could only be made to work in the model shop. Prototypes were built and adjusted by highly skilled technicians to assist the products in the model shops. Effective product development must go beyond the steps of acquiring and implementing product and process design technology as the solution. Product development must address management practices to consider customer needs. Manufacturers may achieve this by designing those requirements into the product, and then ensuring that both the factory and the virtual factory (the company's suppliers) have the capability to effectively produce the product.
Design for Manufacturability and Integrated Product Development may require additional effort early in the design process. However, the integration of product and process design through improved business practices, management philosophies and technology tools will result in a more producible product to meet customer needs, a quicker and smoother transition to manufacturing, and a lower total program/life cycle cost.

The ultimate way to distinguish a company's capabilities is through an increasingly competitive world, product design and customer service. Design for Manufacturability and Integrated Product Development concepts will be critical because of the growing importance of product design. It will be the key to achieving and sustaining competitive advantage through the development of high quality, highly functional products that are effectively manufactured through the integrated product and process design.
The application of design for manufacturability must consider the overall design economics. It must balance the effort and cost associated with development. Refinement of the design to the cost and quality leverage can be achieved with the balance of effort and cost as well. In other words, greater effort to optimize a products design can be justified with higher value or higher volume products.
Design effectiveness is improved and integration is facilitated when:
• Fewer active parts are utilized through standardization, simplification and group technology retrieval of information related to existing or preferred products and processes
• Production is improved through incorporation of design for manufacturability practices.
• Design alternatives are evaluated and design tools are used to develop a more mature and producible design before release for production.
• Product and process design includes a framework to balance product quality with design effort and product robustness









Computer Aided Design (CAD)

Computer Aided Design (CAD) is the use of computers to assist the design process. Specialized CAD programs exist for many types of designs: architectural, engineering, electronics, roadways, and woven fabrics. CAD programs usually allow a structure to be built up from several re-usable 3-dimensional components. The components (such as gears) may be able to move in relation to one another. It is possible to generate engineering drawings to allow the final design to be constructed.
CAD software is commonly used for drafting architectural and engineering drawings. It can also be used for making technical illustrations of any kind.

CAD enables you to prepare fast and accurate drawings and provides flexibility to change drawings with minimal effort. In recent years, many professionals have switched to CAD to enjoy its precision and creativity. Today, many educational institutions include CAD as part of their academic curriculum. As a result, CAD knowledge has become very important to all professionals involved in the field of design and drafting



Value Analysis
Value analysis is a systematic effort to reduce cost or improve the performance of products or services, either purchased or produced.
There a few things that value analysis does when an item is produced: it examines the materials, processes, information systems, and the flow of materials involved.
Benefits
• Reduced production
• Reduced materials
• Reduced distribution costs
• Improved profit margins
• Increases customer satisfaction
• Increases employee moral (teams are involved in purchasing, production, and engineering from both the firm and major suppliers)
Questions that should be addressed by employees and suppliers
• What is the function of the item?
• Is the function necessary?
• Can a lower cost standard part that serves the purpose be indentified?
• To achieve a lower price, can the item be simplified, or its specifications relaxed?
• Can the item be designed so it can be produced more efficiently or more quickly?
• Can features that the customer values highly be added to the item?
Value analysis should always be a part of a continuous effort to improve the performance of the supply chain and increase value for the customer.
Value analysis can focus on the internal supply chain; however, it would benefit more if it is applied to the external supply chain.
Early supplier involvement is an approach that many firms are using. This program includes suppliers in the design phase of a product or service. Suppliers provide useful suggestions for design changes and material choices that will result in more efficient operations and higher quality.
Pre-sourcing involves higher involvement of suppliers. Here, the suppliers are selected early in the developmental process and are given significant responsibility for the design of certain components or systems. Pre-source suppliers have additional responsibility for costs, quality, and on-time delivery of the items produced.
For example:
In the automotive industry, suppliers play an important role in value analysis. In the case of Chrysler's supply chain, competitors are designing and introducing models more quickly, which pressured Chrysler to focus more on their value analysis in their supply chain. Chrysler wanted suppliers to have more involvement, so they introduced S.C.O.R.E (Supplier Cost Reduction Effort). They hoped this would encourage, review, and act on suppliers ideas for quicker and fairer improvements and share the benefits of those ideas with the suppliers.
Chrysler's value analysis proved to be beneficial. They reduced the product development cycle time, which enabled them to produce six new vehicles. It also put Chrysler in a better cost position compared to its competitors.

COST WHILE DESIGNING A PRODUCT
INTRODUCTION
A competitive product must address factors such as cost, performance, aesthetics, schedule or time-to-market, and quality. The importance of these factors will vary from product to product and market to market. And, over time, customers or users of a product will demand more and more, e.g., more performance at less cost.
Cost will become a more important factor in the acquisition of a product in two situations. First, as the technology or aesthetics of a product matures or stabilizes and the competitive playing field levels, competition are increasingly based on cost or price. Second, a customer's internal economics or financial resource limitations may shift the acquisition decision toward affordability as a more dominant factor. In either case, a successful product supplier must focus more attention on managing product cost.

The management of product cost begins with the conception of a new product. A large percentage of the product's ultimate acquisition or life cycle costs, typically seventy to eighty percent, are determined by decisions made from conception through product development cycle. Once the design of the product has been established, relatively little latitude exists to reduce the cost of a product. Decisions made after the product moves into production account for another ten to fifteen percent of the product's costs. Similarly, decisions made about general and administrative, sales and marketing, and product distribution activities and policies account for another ten to fifteen percent of the product's cost.

When a company faces a profitability problem and undertakes a cost reduction program, it will typically reduce research and development expenditures and focus on post-development activities such as production, sales, and general and administrative expenditures. While not suggesting that these are inappropriate steps to take, the problem is that it is too late and too little. Most of the cost structure in a company has been locked into place with the design decisions made about the company's products. A cost reduction or profitability program has to start with the design of the company's products at the very beginning of the development cycle.
VARIOUS TYPES OF COSTS THAT ARE INCURRED

Recurring production cost = production labor + direct materials + process costs + overhead + outside processing

Non-recurring costs = development costs + tooling

Product costs = Recurring production costs + allocated non-recurring costs

Product price or acquisition costs = Product costs + selling, general & administrative + warranty costs + profit

Life cycle costs = Acquisition costs + other related capital costs + training costs + operating costs + support costs + disposal costs
TRADITIONAL APPROACH
In many companies, product cost or life cycle cost considerations are an afterthought. Costs are tallied up and used as the basis for determining the product's price. The primary focus is on product performance, aesthetics, or technology. Companies may get by with this approach in some markets and with some products in the short term, but ultimately competition will catch up and the product will no longer be competitive.

In other companies, cost is a more important factor, but this emphasis is not acted upon until late in the development cycle. Projected costs of production are estimated based on drawings and accumulated from quotes and manufacturing estimates. If these projected costs are too high relative to competitive conditions or customers requirements, design changes are made to varying degrees to reduce costs. This may occur before or after the product has been released to production. The result is extended development cycles and added development cost with these design iterations.

In some organizations, development costs receive relatively little attention as well. There may not be a rigorous planning and budgeting process for development projects. Budgets are established without buy-in from development personnel resulting in budget overruns.
DESIGN TO COST
Effective product cost management requires a design to cost philosophy as its basis since a substantial portion of the product's cost is dictated by decisions regarding its design. Design to cost is a management strategy and supporting methodologies to achieve an affordable product by treating target cost as an independent design parameter that needs to be achieved during the development of a product. A design to cost approach consists of the following elements:
• An understanding of customer affordability or competitive pricing requirements by the key participants in the development process;
• Establishment and allocation of target costs down to a level of the hardware where costs can be effectively managed;
• Commitment by development personnel to development budgets and target costs;
• Stability and management of requirements to balance requirements with affordability and to avoid creeping elegance;
• An understanding of the product's cost drivers and consideration of cost drivers in establishing product specifications and in focusing attention on cost reduction;
• Product cost models and life cycle cost models to project costs early in the development cycle to support decision-making;
• Active consideration of costs during development as an important design parameter appropriately weighted with other decision parameters;
• Creative exploration of concept and design alternatives as a basis for developing lower cost design approaches;
• Access to cost data to support this process and empower development team members;
• Use of value analysis / function analysis and its derivatives (e.g., function analysis system technique) to understand essential product functions and to identify functions with a high cost to function ratio for further cost reduction;
• Application of design for manufacturability principles as a key cost reduction tactic;
• Meaningful cost accounting systems using cost techniques such as activity-based costing (ABC) to provide improved cost data;
• Consistency of accounting methods between cost systems and product cost models as well as periodic validation of product cost models; and
• Continuous improvement through value engineering to improve product value over the longer term.


TARGET COSTING AS A FOUNDATION
Executive management, marketing, program/product managers, and development team personnel all need to have an understanding of customer affordability constraints or competitive market place requirements. Everyday customers buy products with functions, features and performance in excess of their needs and wonder how much is money is wasted on these unneeded capabilities. A keener awareness of design to cost requirements is needed. This happens when product development team members and executive management have direct contact with customers to understand their true needs and hear their sensitivity to costs directly, or when they are exposed to competitor's product pricing in the market place.

Based on this awareness of customer affordability or design to cost requirements, cost targets should be formally established. These targets should be developed based on pricing formulas and strategies and consideration of price elasticity. Prices and target costs will also have to consider projected production volumes and amortization of non-recurring development costs. In a more complex product or system, the top-level target cost will need to be allocated to lower level subsystems or modules. This will establish a measurable objective for a product development team where multiple teams are involved in a development project.

In an environment where development cost is significant relative to total recurring production costs, more attention will need to be paid to managing these non-recurring development costs. Non-recurring development cost will be a function of the extent of new product and process technology and the extent of use of new materials, parts and subsystems. If product is an evolutionary step with minimal development risk, non-recurring development costs will be lower. The use of standard parts and modules from other existing products will also lower non-recurring development costs. This suggests a strategy of not letting product and process technology application get too far ahead of customer affordability requirements.

Product development team members should buy-in to or commit to these product cost targets and development budgets to improve the chances of meeting these objectives. When empowered product development teams actually develop these budgets and targets, a sense of commitment to these budgets or targets develops. If the budgets or targets are established by someone outside the product development team (e.g., by a product or program manager, a management team, a system integration team, or a project engineer), the targets and budgets should be carefully reviewed with the team members to insure they understand these cost objectives and the assumptions behind them. While competition will generally dictate that stretch goals be established, these goals should be accepted by the team as achievable.



COST MODELS AND COST DATA
Once a team has a set of requirements and a cost target established, they will begin exploring alternatives as part of the design process. In the absence of other information, they will tend to evaluate a product concept primarily based on its performance merits and, at best, secondarily consider a subjective estimate of the relative costs of the design alternatives. Ad-hoc cost studies or trade studies may be prepared for significant issues, but tools to regularly support this process are lacking. Tools and information need to be provided to a product development team so that they can more proactively and objectively consider the cost implications of various design approaches on a regular basis. A product cost model or life cycle cost model provides an objective basis for evaluating design alternatives from a very early stage in the development cycle.

As the organization proceeds through the design of both product and process, the product cost model is used to project and accumulate product costs to use as a factor in evaluating design alternatives and to refine the design to meet cost targets. If it is determined after extensive evaluation that the product requirements cannot be achieved at the target cost, the requirements and targets will need to be re-evaluated and modified.

Early in the development cycle, the product cost model will be based primarily on characteristics of the product design with relatively little consideration of the actual manufacturing process. The model will be driven by general design parameters, product/part characteristics, and critical parameter tolerances. The model will be implicitly based on assumptions about existing processes and process relationships to types of materials, sizes and tolerance requirements.

Later in the development cycle, a different type of product cost model will be used that will consider the specific manufacturing processes. This type of model will be built around existing processes where relatively good historical cost data should exist. On occasion, new manufacturing processes will need to be considered. Data will need to be gathered as a basis for creating or extending the product cost model for the new process(es). Information to support this model development can be obtained from equipment suppliers, other users of this manufacturing process, facility engineers, and manufacturing engineers.

Cost data will also need to be obtained for many purchased parts and sub-assemblies. This information may be available in the form of catalog prices or supplier quotations. However, to support cost projections much earlier in the development cycle, a close working relationship with the company's supplier base will allow preliminary cost projections to be obtained without the formalized commitment of a quotation. The supplier relationship and company information needs may even develop to the point that the company works with the supplier to develop a supplier cost model based on the supplier's process capabilities.

A company's initial attempt with a product cost model may utilize a spreadsheet program or a bill of material cost roll-up capability. The focus is on accumulating and tracking estimated material, part and assembly costs. This summarization capability may start with cost estimates and update the estimates with quoted prices or catalog prices for purchased items or manufacturing's estimates based on preliminary drawings for fabricated items and assemblies.

Over time, a more sophisticated product cost model should be developed that will project costs based on the characteristics of parts and the overall product design. This type of cost model might be based on commercially available design for manufacturability (DFM) or design for assembly (DFA) software packages. These systems typically generate an estimate of fabrication or assembly labor time and costs or machine cycle time. and costs as part of their capabilities. In addition, there are commercially available cost models that allow a company to develop a custom model of their manufacturing processes and project even more exacting cost estimates based on their product or part characteristics. These individual packages or modules will be oriented toward a limited part or product domain, e.g., manual or automated assembly, printed circuit boards, sheet metal, injection molding, casting, etc. Multiple modules will typically be needed to support overall product cost modeling. In addition, a database reporting capability or spreadsheet will be needed to accumulate the many individual elements of cost from these various cost modeling system components so that effective overall trade-off's can be made.

Over the course of the development cycle, several different costing tools may be used by an organization. In the early stages of product development, an estimating system may be used to respond to a customer request for quotation or request for proposal or to develop an internal estimate to prepare a cost justification for the development project to management. This cost model would be based on parametric or analogy techniques. Parametric techniques would take general characteristics about the product such as size, weight, number of functions, etc., and use these parameters to develop a general cost estimate. Analogy techniques would take a similar product's cost and use a "same as except for" approach to develop a cost estimate based on the cost of an existing item.

As the development cycle moves into the product design phase, cost models and DFM/DFA tools as just described would be used. These estimates would be more refined since more is known about the design of the product and its cost drivers. Once the product design is essentially complete, tools and methods such as computer-aided and manual process planning and tools to support the development of labor standards would be used to develop even more refined cost estimates. Finally, as the product moves into production, cost accounting systems would collect costs by product, assembly, part, and operation. These costing tools are illustrated below.

These costing tools should have a consistent basis for accounting for costs and a consistent set of rates. In addition, the organization should establish procedures to periodically validate the cost models by comparing the projected costs with actual costs and adjusting parameters in the model to yield projections closer to actual experience.

In some cases, life cycle costs may need to be considered as the basis for making design decisions. This will add to the complexity of a cost model. Data will need to be gathered on operating costs (e.g., facilities, training, manpower, fuel or energy consumption, etc.), maintenance costs, and disposal costs. While these costs can be modeled, historical data related to operations, reliability and maintenance often is needed. This means that a customer will need to provide this data or that the company have close working relationships with customers where this data is routinely gathered.

To support the operation of these cost models, cost data will need to be readily accessed. Some companies try to restrict access to cost data to prevent this information leaking out to competitors. This restricted access undermines a design to cost methodology and empowerment of the product development teams. This data needs to be made available to support cost modeling. Typical data required will be labor rates, overhead rates, learning curves, efficiencies, historical and projected parts costs, and escalation projections for labor and materials.

Traditional approaches to allocating overhead or burden costs generally based on direct labor. However, direct labor is becoming an insignificant cost component in many products. Further, there is frequently a lack of understanding of sunk costs and fixed versus variable indirect costs. All of this has led to distortion of overhead cost allocations and inappropriate design and sourcing decisions. As companies move toward activity-based costing, the quality of the cost data will improve. Costs will be more closely based on the consumption of resources and the aberrations associated with allocating indirect costs will diminish.
DECISION-MAKING
In the absence of product cost models and product development teams, each functional organization will make decisions from their own perspective, trying to manage the elements of cost that they are responsible for. For example, decisions to minimize non-recurring design engineering expenditures may result in a less producible product, driving up material and labor costs in manufacturing. Decisions to minimize tooling capital expenditures may also have the same effect in manufacturing costs. Test engineering may try to minimize its non-recurring development budgets and capital expenditures resulting in a less automated test process and higher recurring test costs for production verification.

Product development teams provide the organizational mechanism to bring the various disciplines together to optimize product costs from an enterprise perspective. Cost models provide the means for the team to objectively consider the implications of various development decisions. A company operating philosophy that emphasizes cost as a factor in the development decision-making process is a final requirement.

Access to product cost projections early in the development cycle will improve decision-making about design alternatives and lead to refinement of the design to come closer to the established cost targets. These costs projections will aid decisions about the design of the manufacturing process as well, focusing attention of elements of the product costs that do not meet the target and allowing consideration of alternative processes while it is still early enough in the development cycle to introduce new processes. The key is to emphasize management of product costs during development, not merely accumulating costs as designs are completed.
SUMMARY
Since the decisions made during the product development cycle account for seventy to eighty percent of product costs, product cost management must begin with the start of product development. Product development personnel must understand competitive pricing or customer affordability requirements. Target costs must be established at the start and used to guide decision-making. Development personnel must operate as entrepreneurs in making hard decisions about the product and process design to achieve target costs. Cost models must be provided to support decision-making early in the development cycle. And the quality of information and the cost models must be continually improved and refined. This increased focus on product or life cycle costs will lead to significantly reduced costs and more satisfied customers.
The costs of poor quality assurance
Putting out products significantly poorer than their predecessors has both direct and indirect costs. The most direct cost is support. As soon as new bugs escape the factory, the phone lines are flooded. It’s bad enough when the early adopters snatch up Version 1.0 and start immediately complaining. Most of us eventually learned to wait around for Version 1.1. Dish Network customers don't have that option, though, because they release their products on their subscribers without any notification or choice, by downloading the new software into unsuspecting receivers overnight. There is little or no ramp-up. All of a sudden, Support is getting a whole bunch of phone calls, and they don’t even know about the problems, let alone have work-arounds.


Other costs include upsetting the workforce. I’ve worked on new products that, because of rushed schedules or poor QA, were disasters. Not only is everyone thrown into a tizzy trying to put out version 1.01, productivity plummets from the combination of stress, depression, and embarrassment. (I can’t even imagine what it must feel like to be the designers who cleaned up so many parts of the 721’s interface in the 115 release, only to see their good work indirectly cripple the product due to the lack of systematic testing.)

Then, there’s the problem of millions of people telling their friends about Dish's unreliable, cantankerous receivers. The average Joe cannot differentiate between bad hardware and software. All he knows is that it used to work and now it doesn’t.

Which leads to another direct cost? When I reported an inability to watch shows off-line, Dish Network’s Level One support people immediately announced that there must be a hardware problem with my 721, and began to arrange for a replacement unit to be shipped to me. (This is not the first time this has happened.) It was only after I insisted that I was looking at a software problem and demanded to be switched to Advanced Support that I was able to get someone capable of exploring the actual problem.

I don’t know what percentage of units returned to Dish turn out not to have anything wrong with the hardware, but my guess, from my own experience over the years, is that the figure would be high, a direct result of improperly-tested software being released on an unsuspecting public and an equally-unsuspecting support staff.
Of course, when you have a high percentage of properly functioning hardware being returned, units with genuine, but intermittent, problems will also tend to judged as being OK, absent the intermittent problem revealing itself at the moment of service. These will then be recycled to users, thereby replacing good receivers with a temporary software problem with bad receivers with real, but intermittent problems. If proper tracking is not done, this cycle can repeat itself over and over before a user finally defenestrates the offending receiver.

ACCESSIBLE DESIGN
What is Accessible Design?
"Accessible Design" is the term used for the process of extending mass market product design to include people who, because of personal characteristics or environmental conditions, find themselves on the low end of some dimension of performance (e.g., seeing, hearing, reaching, manipulating). Accessible Design is not (or should not be) separate from standard mass market design. Rather it is an extension or elaboration of general design principles to cover a wider range of human abilities/limitations than has traditionally been included in product design.
Thus Accessible Design is a subset of what is termed Universal Design. Where Universal Design covers the design of products for all people and encompasses all design principles, Accessible Design focuses on principles that extend the standard design process to those people with some type of performance limitation (the lower ability tail of Universal Design).
Accessible Design is a balancing act. To begin with, we must acknowledge that it is not possible to design everything so that it can be used by everyone. There will always be someone with a combination of severe physical, sensory and cognitive impairments who will not be able to use it. However, it is equally unreasonable to rely on the existence (or development) of special designs for each major product to accommodate each one of the immense variety of disabilities (and combinations of disabilities). This makes it necessary to look toward a combination of approaches for meeting the needs of people with disabilities, ranging from the incorporation of features into products that will make them directly usable ("from the box") by more people with disabilities to the inclusion of features that make them easier to modify for accessibility.



Environmentally Friendly Design


Consumer demand and shorter product life cycles have given rise to an increasing volume which has increased the end-of-life products and packaging materials for disposal. Landfills are becoming increasingly scarce. Other disposal method ideas have now been developed. Responsible management of global energy and environmental resources is also gathering pace. If we adopt the "polluters pay" principle, more legislation and regulations will have to be formulated to require that manufacturers reclaim their waste, and reuse the recyclable fraction and then dispose of the residue, which can lead to extra costs. Customers are demanding products that are both energy efficient and environmentally safe. Manufacturers seek to manage their impact on the environment by reducing consumption of limited natural and energy resources. And also by re-using or re-cycling (see figure).




Example :

Product design


As one of the world’s largest IT companies, HP’s greatest impact on the environment is through our products. HP is committed to providing products and services that are environmentally sound throughout their life cycles. This chapter describes our efforts in product design, packaging, reuse and recycling.
Environmental impacts occur at every stage of the product life cycle: from product design, through manufacturing and transport, to use by customers and, finally, disposal at the end of a product’s life.
Managing these impacts is a complex challenge as well as an opportunity. We apply design expertise to create innovative products and services with reduced environmental impact. This aligns with our customers’ expectations of high performance, low cost and minimum environmental impact, and provides HP a potential source of competitive advantage. For example, flat panel displays, notebooks, multi-function handhelds and all-in-one printers use less material and are more energy-efficient than the desktop PCs and individual scan, fax, copy and print devices they replace for many customers. These newer products help reduce energy consumption, CO2 emissions and space used in transport, all of which result in lower environmental impact. HP ensures environmental design does not compromise other product requirements such as quality, reliability and price.

Design for environment

As one of the world’s largest consumer IT companies, a leading IT supplier to small and medium-size businesses and a leader in enterprise computing, HP’s largest impact on the environment is through its products.
The environmental performance of products is largely determined at the design stage. Through intelligent design we can reduce the environmental impact of our products, and that of our customers.
To accomplish this objective, HP established its Design for Environment (DfE) program in 1992.
Design-for-Environment (DfE) is an engineering perspective in which the environmentally related characteristics of a product, process or facility are optimized. Together, HP's product stewards and product designers identify, prioritize and recommend environmental improvements through a company-wide DfE program. HP's DfE guidelines derive from evolving customer expectations and regulatory requirements, but they are also influenced by the personal commitment of its employees.
The Design for Environment program has three priorities:
• Energy efficiency – reduce the energy needed to manufacture and use our products
• Materials innovation – reduce the amount of materials used in our products and develop materials that have less environmental impact and more value at end-of-life
• Design for recyclability – design equipment that is easier to upgrade and/or recycle
HP's DfE guidelines recommend that its product designers consider the following:
• Place environmental stewards on every design team to identify design changes that may reduce environmental impact throughout the product's life cycle.
• Eliminate the use of polybrominated biphenyl (PBB) and polybrominated diphenyl ether (PBDE) flame-retardants where applicable.
• Reduce the number and types of materials used, and standardize on the types of plastic resins used.
• Use molded-in colors and finishes instead of paint, coatings or plating whenever possible.
• Help customers use resources responsibly by minimizing the energy consumption of HP's printing, imaging and computing products.
• Increase the use of pre-and post-consumer recycled materials in product packaging.
• Minimize customer waste burdens by using fewer product or packaging materials overall.
• Design for disassembly and recyclables by implementing solutions such as the ISO 11469 plastics labeling standard, minimizing the number of fasteners and the number of tools necessary for disassembly.
Product Design for the Virtual World
Online gaming is not all violence and destruction. Building on the momentum of alternative worlds such as Myst and Sim City the developers of Second Life have taken the ideas of virtual worlds to the next level. A world with is own commerce and community where creation and character rule. “Second Life is what MySpace wants to be,” he says. “People are inventing new uses for it all the time. And the e-commerce aspect of it is going to be huge.” Although no major brick-and-mortars are doing business from within SL yet, they are taking note. The banking giant Wells Fargo built its own branded island inside SL, designed to train young people to be financially responsible. Wal-Mart, American Express and Intel are looking at using SL for their corporate training. And why not? With its natural interactivity and open platform for creation, Second Life, or something like it, may very well be the next generation of the Web.
For example, if I was online banking in SL, I wouldn’t have to browse through several static screens of text. I could just walk into a virtual bank, stroll up to a teller, and deposit real-life money the newfangled, old-fashioned way: by talking to a person. Like the Web, all but the basic infrastructure in SL is built by the people who populate it. Want a conference room where you can swap blueprints with a team around the world? Create one, and other avatars can come inside. Want to sell your band’s music? Build a jukebox, fill it with MP3s, and charge SL residents in Linden dollars (SL’s currency) to download them.
Design Reviews:
A design review is a meeting involving the product team and selected experts, consultants and managers. The purpose of a design review is to take a hard critical look at the current design to determine if the project should continue and, if it does continue, how to make the design better. The product team should present their design to the group and field any questions. They should remember when doing this that they are justifying their survival as a team as well as justifying the continuation of the project. Then, the supervising manager of the project should conduct the critical review process using the product design specification as a guide...
• will the design meet expected marketing goals? (marketing audit)
• does the design meet the established performance goals? (quality audit)
• does the design address expected customer wants and needs? (quality audit)
• can the design be produced on schedule? (manufacturing audit)
• is the design as simple and error-free to produce as it could be? (manufacturing audit)
• can the design be produced with increased safety to workers? (safety audit)
• will the design mitigate existing liability exposure or create new liability exposure? (safety audit)
• does the design facilitate projected service and maintenance goals? (life cycle audit)
• is the product recyclable at the end of its useful life? (life cycle audit)
• does the product production, use or disposal pose any environmental problems? (environmental audit)
A design review is a rigorous self-evaluation of a design that is used to determine if resources are allocated wisely, if goals will be met, and if the best design possible will be used.
A quality audit is done to identify potential problems that must be addressed to improve quality. A product quality audit should be based on the voice of the customer and benchmark data from competing products. A process quality audit should be based on the quality of the product produced by the process and should involve substantial operator input.
Many rules and procedures outdate quickly. All rules and procedures, except those mandated by law, should be regularly evaluated. When a rule or procedure has outlived its usefulness, discard it. Simplify everything all the time! Rules and procedures are usually put into place to solve some current problem, although quite often they produce unwanted side effects later on. If the problem is no longer a problem, perhaps the rules and procedures it spawned are no longer necessary. If the side effects are more of a problem than the original problem, the rules and procedures that caused them should be reviewed and revised, or eliminated.
EXAMPLE:
APPLE COMPANY:
From designing for energy efficiency to using recyclable materials, Apple’s design philosophy focuses on the future of our products and the future of our planet.

Innovative and efficient
Apple strongly believes that reducing the environmental impact of our business starts with the design of our products. We set high standards — based on our own requirements and those set by programs such as ENERGY STAR® — in an effort to create products that offer excellent environmental performance throughout their life cycle.

Packaging for the fifth generation iPod was reduced by 69% compared with the previous generation.
The iMac and Mac mini are great examples of ultra-efficient design, and illustrate the ways in which Apple continually refines products to further improve environmental performance. Both products also feature built-in wireless technologies such as AirPort and Bluetooth, reducing the need for PVC-insulated cabling. The Apple Product Environmental Specifications page details the environmental attributes of all our computers, monitors, and servers.
Less is more
Their designs also help to reduce energy consumption, minimize the use of environmentally damaging substances, and optimize the useful life of our products — all of which lead to a smaller environmental footprint. Lower energy consumption reduces electricity demand and alleviates the detrimental effects of power generation. Using recyclable materials cuts the amount of waste going into landfill. And restricting environmentally damaging substances makes products safer for consumers and businesses during their useful life and beyond.
Examples of continuous improvement of iMac design
The iMac design has continuously improved generation after generation, resulting in increased material efficiency, decreased packaging mass and volume, and decreased energy consumption.

Reducing packaging
 Packaging for the current-generation iMac uses 59% less plastic and 20% less paper than the iMac G4 flat panel, while taking up 40% less space.
 The 15.4-inch MacBook Pro packaging is 45% lighter and uses 45% less volume than the 15-inch PowerBook G4.
 The packaging volume of our fifth generation 30GB and 80GB iPod was reduced by 69% from earlier models. This enables 120 more units to be shipped per pallet compared to the fourth generation 30GB iPod.
Apple recently reduced packaging for the iPod and many software titles by more than 50% — eliminating hundreds of thousands of pounds of packaging waste.
Recyclable materials
Apple uses highly recyclable materials such as polycarbonate for iMac and MacBook enclosures and aluminum for MacBook Pro, Power Mac G5, and Cinema Display enclosures. The use of these high-value materials encourages recycling, which helps to minimize waste at the end of the product’s life.
Dematerialization
Apple’s ultra-compact product and packaging designs lead the industry in material efficiency — reducing waste and energy consumption and maximizing shipping efficiency.
Responsible Manufacturing
Apple’s record of restricting harmful substances goes back well over a decade? Learn more about substances currently restricted or banned in Apple’s products, packaging, and? Manufacturing processes.

The purpose of packaging and labels
• Protection against physical impact on object - The objects enclosed in the package may require protection from, among other things, damage caused by physical force, moisture, oxygen, rain, heat, cold, sunlight, pressure, airborne contamination, automated handling devices, or any combination of one or more of these.
• Protection against dust and dirt - In a modern supply chain products are subject to different environments. They start packed in boxes and stacked on a pallet. In about 80% the products end up in a distribution center for commissioning and fine distribution to the store where the product will be sold. During this period the physical protection also applies to dust and dirt that can easily settle on the consumer packaging. Especially products packed in plastic containers like shampoos, detergents and ketchups due to static charging easily attract dust and dirt. As a consumer we don't want to get dirty hands when picking up a product from the shelf. Transportation packaging keeps our products clean and neat until the shelf and helps cut cleaning costs on the shop floor.
• Agglomeration - Small objects are typically grouped together in one package for reasons of efficiency. For example, a single box of 1000 pencils requires less physical handling than 1000 single pencils. Alternatively, bulk commodities (such as salt) can be divided into packages that are a more suitable size for individual households.
• Information transmission - Information on how to use, transport, or dispose of the product is often contained on the package or label. An example is pharmaceutical products, where some types of information are required by governments.
• Marketing - The packaging and labels can be used by marketers to encourage potential buyers to purchase the product. Package design has been an important and constantly evolving phenomenon for dozens of years.
• Reducing theft - Some packages are made larger than they need to be so as to make theft more difficult. An example is software packages that typically contain only a single disc even though they are large enough to contain dozens of discs. These packages may also be deliberately difficult to open, to hamper thieves from removing their contents without drawing notice. Packages also provide opportunities to include anti-theft devices, such as dye-packs or electronic article surveillance tags, that can be activated or detected by devices at exit points and require specialized tools to deactivate. Using packaging in this way is a common tactic for loss prevention.
• Prevention of pilferage and tampering - Products are exposed to many contacts in the supply chain. Persons handling could steal products (pilferage), replace full products with empty ones or add unwanted contaminants to the contents (tampering). Packaging that cannot be re-closed or gets physically damaged (shows signs of opening) is very helpful in the prevention of these acts. The flaps of corrugated and cardboard boxes are therefore glued in such a way that any opening irreversibly damages them. The over packaging of certain objects has led to a phenomenon known as wrap rage.

Product packaging design can be the most important aspect of your consumer product. Packaging design conveys to the customer the most important features of your product as well as getting the customer to SEE your product amidst all the other myriad of competitor’s products. For “big box” retailers it is also important to have the smallest footprint possible to maximize their return on investment (ROI) while also conveying a message good enough to make your product sell.


CONCLUSION:

Thus product design is a very complex process and should be done properly in order to yield best results. A company can succeed i.e its product will succeed in the market if and only if it has a good product design which is liked by the consumers. The product needs to be designed very well in order to attract the consumers and increase demand. The concept of product design has to be accepted and used by each and every company.
The most important thing about product design is its processes and the various steps. With the help value analysis, concurrent engineering, computer aided design etc , a product can be designed to suit the various need of the consumers. In short, a product design is a tough job to be done taking care of various requirements of the people.
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Re: PRODUCT DESIGN - April 4th, 2016

Quote:
Originally Posted by sanaa View Post
Meaning
Product Design can be defined as the idea generation, concept development, testing and manufacturing or implementation of a physical object or service. It covers more that the discipline name - Industrial Design. Product Designers conceptualize and evaluate ideas, making them tangible through products in a more systematic approach. The role of a product designer encompasses many characteristics of the marketing manager, Product management, industrial designer and design engineer. The title name of Industrial designer has in many cases fallen into the category of an art. The role of product designer combines art, science and commerce for tangible non-perishable items. This evolving role has been facilities by digital tools that allow designers to communicate, visualize and analyze ideas in a way that would have taken greater manpower in the past.
As with most of the design fields the idea for the design of a product arises from a need and has a use. It follows certain method and can sometimes be attributed to more complex factors such as association and Telesis.
Aesthetics is considered important in Product Design but designers also deal with important aspects including technology, ergonomics, usability, human factors and material technology.
Product designers are equipped with the skills needed to bring products from conception to market. They should also have the ability to manage design projects, and subcontract areas to other sectors of the design industry.
Product Development
Akio Morita, the chairman of Sony Corporation in Japan, wanted a radio he could carry with him and listen to wherever he went. From that small desire was born the Sony Walkman, a radio small enough to be worn on a belt or carried in a pocket. With a headset smaller than earmuffs, the Walkman can be worn and listened to anywhere.
Not all product development is so easy. Most of today's products (including many of the basic necessities of food, clothing, and shelter) are the result of creative research and thinking by staffs of people. A new product is one that is new for the company that makes it. A hamburger is not new, but when McDonald's introduced the Big Mac, it was a new product for that company.
Decisions to make a new product may be the result of technology and scientific discovery. The discovery can be accidental or sought for. The original punch-card data-processing machine was devised for use by the Bureau of the Census. Penicillin, by contrast, was an accidental discovery and is now one of the most useful antibiotics. Products today are often the result of extensive marketing research to learn what consumers and retailers want. Ideas for products may come from consumers, salespeople, engineers, competitors, trade associations, advertising agencies, or any number of other sources.
Once a product has been approved, it must be designed, made, tested, revised, and retested. It may be subject to test marketing (sold or given away in a few places) before being put on the market generally. This whole process may take several years.
Package design and brand-name selection are two major aspects of product planning. Packaging not only contains and protects a product, but also provides a form of advertising intended to appeal to consumers by its appearance or convenience. Carbonated beverages could be sold in colorless glass jugs, but they are far more appealing and convenient in colorful six-packs of aluminum cans. Packaging also can add significantly to the cost of a product.
The packaging of many products is regulated by governments. In the United States the Federal Fair Packaging and Labeling Act of 1966 requires certain information to be placed on cartons, boxes, and other packaging for products used by consumers. Nutrition information, for instance, is required on cereal boxes. Most packaging today carries a universal product code stamped on it. The code can be read by electronic scanners to speed up the buying process and to automate inventory control.
Nearly every product carries a brand name, often used in conjunction with a company symbol, to identify it for consumers and to aid in advertising. The goal of a company is to build brand loyalty in consumers and to enhance its reputation.
There are two major types of brand names: manufacturer brands and dealer brands. The manufacturer brand is given by the maker of the product, such as Ford Escort automobiles or Gillette Trac-II razor blades. A dealer brand may be given by a middleman or a retail store. Sears, Roebuck and Company, for example, has given the brand name Kenmore to its appliances, though they are not manufactured by Sears. Grocery chains often give brand names to items specially packaged for them. Brand names, like trademarks, can be protected by law (see Trademark).

Classes of Consumer Products
The traditional distinction between products that satisfy needs and those that satisfy wants is no longer adequate to describe classes of products. In today's prosperous societies the distinction has become blurred because so many wants have been turned into needs. A writer, for instance, can work with paper and pencils. These are legitimate needs for the task. But the work can be done more quickly and efficiently with a word processor. Thus a computer is soon viewed as a need rather than a want.

In the field of marketing, consumer goods are classed according to the way in which they are purchased. The two main categories are convenience goods and shopping goods. Two lesser types are specialty goods and unsought goods. It must be emphasized that all of these types are based on the way shoppers think about products, not on the nature of the products themselves. What is regarded as a convenience item in France (wine, for example) may be a specialty good in the United States.
People do not spend a great deal of time shopping for such convenience items as groceries, newspapers, toothpaste, razor blades, aspirin, and candy. The buying of convenience goods may be done routinely, as some families buy groceries once a week. Such regularly purchased items are called staples. Sometimes convenience products are bought on impulse: someone has a sudden desire for an ice cream sundae on a hot day. Or they may be purchased as emergency items: the car battery dies just as the family is about to leave for vacation; to avoid delay, a new battery must be bought and installed.
Shopping goods fall into two classes: those that are perceived as basically the same and those that are regarded as different. Items that are looked upon as basically the same include such things as home appliances, television sets, and automobiles. Having decided on the model desired, the customer is primarily interested in getting the item at the most favorable price. Items regarded as inherently different include clothing, furniture, and dishes. Quality, style, and fashion will either take precedence over price, or they will not matter at all.
Specialty goods have characteristics that impel customers to make special efforts to find them. Price may be no consideration at all. Specialty goods can include almost any kind of product—particular types of unusual food; an expensive imported car; an item from a well-known store, such as Gucci or Tiffany; or a dinner at a new restaurant. Normally, specialty goods have a brand name or other distinguishing characteristic.
Unsought goods are items a consumer does not necessarily want or need or may not even know about. Promotion or advertising brings such goods to the consumer's attention. The product could be something new on the market—as the Sony Walkman once was—or it may be a fairly standard service, such as life insurance, for which most people will usually not bother shopping.







PRODUCT LIFE CYCLE

How long a product life cycle takes and the length of each stage varies across products? A cycle could vary anywhere from 90 days, to 100 years or more.

Sales and profits do not move together over time.
Summary: The product life cycle is the cycle of a product from the introduction of it into the market to the decline or removal of that product from the market. Each stage is very important to the product. In order for the product to be sold it must move from one stage to the other. Product life cycle is also very important for marketers so they can determine how to advertise and market the product. Total sales of the product in the industry vary in each of the five stages. They move from zero in the development stage, low in the introductory stage, high in the market maturity stage, and then back to low in the sales decline stage. The stages are as follows:
Introduction: In the introduction stage, sales tend to be low because of the new idea or product being introduced into the markets. Customers aren't even looking for the product yet and may not be aware of its benefits or advantages over their current brands. Promotion is needed to aware potential customers about the new product. Money is invested in developing the market in the anticipation of future profits
Growth: In the growth stage, the industry sales tend to grow very rapidly. The industry profits begin to rise and then start to fall. As more customers buy the product the innovator begins to make a profit. Competitors may see this opportunity and enter the market to provide competition. Some companies may copy the successful product or they may try to improve the product in order to compete with the company. Other companies may try to make their products more appealing to some target markets. All of the new entries result in more product variety. In this stage the profits are the largest. Also in this stage the industry profits begin to decline because of the increased competition that this new product creates.

Maturity: This stage occurs when the industry sales level off. The competition is more aggressive as competitors have entered the market for profits. The industry profits continue to decrease during the maturity because the promotion costs rise and competitors are continuing to cut their prices to attract more business. New firms still enter the market at this stage. Because of the late entry these firms skip the early life cycle stages, including the profitable growth stage. These new firms must now try to take market share from the more established firms. This can be a very difficult and expensive in a very saturated, flat market. Customers who are satisfied with their current products will also not be interested in switching to an unknown brand. An example of the maturity stage in the United States is the market for cars, boats, television sets, and most household appliances. These products may continue to be in the maturity stage for many years until a new product idea is developed and makes the old product obsolete.
Decline: During the sales decline stage the new products are replacing the old products. The competition from the declining products becomes more energetic. Firms with strong brands may make profits until the end of the sales decline because they have successfully differentiated their products from the others. Firms may also keep some sales by appealing to their loyal customers or those who may be slow to try the new ideas. These customers may switch later which will smooth the sales decline







Product Life Cycle Length

Sales and profits do not move together over time. Sales of some products are influenced by fashion (the currently accepted or popular style).
Shorter life cycles mean that firms must constantly develop new products to stay in business. They must also offer marketing mixes that make the most of the Market Growth Stage, when profits are the highest.
Industry profits decline while industry sales are still rising.
Market Specific Product Life Cycles
Product life cycle can not describe a product class (gasoline-powered automobiles),
A product form (station wagons) or a brand (Ford Taurus). The product life cycle is generally used to describe industry sales and profits for a product idea within a particular market.
Sales and profits of an individual product, model, or brand may not and sometimes do not follow the life-cycle pattern.
They can vary up and down through the life cycle and sometimes move in the opposite direction of industry sales and profits. A product idea may also be in a different life-cycle stage in many different markets.
For example a firm could introduce or withdraw a specific product during any stage of the industry product life cycle. A "me-too" brand introduced during the market growth stage may never get any sales and suffer a quick death. Or, the product could reach its peak and start to decline before the market even reaches the maturity stage.
Sometimes market leaders enjoy high profits during the maturity stage, even though the industry profits are declining. In some cases the innovator brand could lose so much money in the introduction stage that is has to drop out just as the others are beginning to receive profits in the market growth stage.
How they see product life cycles depends on how broadly they define the market. About 80% of all U.S. households own microwaves, which leads to the conclusion that they are in the maturity stage. In some countries microwaves are still in the early growth stage. For example, in 1994, microwaves were in less than 15% of homes in Switzerland. U.S. microwave manufacturers can extend their distribution to off shore markets and expand their product life cycles.
Product life cycles also vary on how they define the needs of customers in a product market and who the competitors are. For example consider the needs to store and prepare foods. Wax paper sales in the U.S. started to decline when Saran Wrap was introduced. In the early 1970's sales of Saran Wrap, and related products began to decline sharply when plastic storage bags were introduced and became popular. Sales increased by the end of the decade. The product didn't change but the needs of the consumer did because as microwaves became more popular consumers realized that saran wrap worked very well in microwave cooking.
If a market is defined too broadly there may be many competitors and the market may appear to be in the maturity stage. However, if the focus is on a narrower sub-market, and a particular way of satisfying consumer’s needs, then they could observe much shorter life cycles as new product ideas replace the old product ideas.




















PRODUCT DEVELOPMENT STAGES

Development: activities that turn a specific set of technologies into detailed designs and processes.
Designs for products are developed using both marketability and ease of production.
Studies have shown that ideas for development have begun with the recognition of the market and production needs and not from new technological opportunities.
There are seven stages of new product development.
1. Generating Ideas
2. Screening Ideas
3. Developing and Testing Ideas
4. Conducting a Business Analysis
5. Product Development
6. Test Market
7. Commercialization

Generating Ideas

• When generating ideas you should start by brainstorming ideas and ask questions about what you want to achieve
• Consider products that will fit the company
• Creativity is a key point
• Review the customers suggestions


Screening Ideas

• When screening ideas you should start by looking at the grand scheme of the development process.
• Then begin to narrow ideas
• In order to move into development and testing the idea must meet different criteria
• Does the product fit the overall mission of the company?



Developing and Testing Concepts
• The company must ask these questions: Why would a customer buy this product? What would be the benefit ?, How might this product be used ?
• Test the usefulness of the new product idea with customers and have an
Conducting Business Analysis
• There should be an analysis on the costs, return of investment, cash flow, fixed cost, and variable cost in the long run
• Studies have shown that high risk ideas provide the most successful new products
New Product Development
• In this stage your concepts begin to come together
• Develop prototypes
• Assign names and brand identity to the new product.
• Formulate marketing mix
• It is critical for research and development, engineering, packaging and marketing to use teamwork

Test Marketing
• Test marketing can be very time consuming, expensive and prone to competitive sabotage
• Companies must plan carefully during this stage.
Commercialization
• Companies need to remember to start small
• They must also plan for a modest product turnout
• Companies should also consult with other people who have gone through similar processes
These stages are not the same for every company
How to Improve Product Design
• Establish multifunctional design teams
• Concurrent design teams rather than sequential
• Create a design for manufacturing and assembly
• Create a design that is environmentally safe
Measures of Design Quality
• Calculate the number of parts and options
• Calculate the percentage of standard products
• Use existing manufacturers
• Calculate first run costs
• Calculate total product cost and product sale
• Calculate first year cost of service and repair
• Calculate cost of engineering during the first six months


An example of development is using a restaurant. The core products of a restaurant are food and drink. The marginal products are tables, chairs, and silverware. Services of a restaurant include courtesy, speed, quality, and less tangible characteristics such as taste, atmosphere, perceptions of status, comfort, and a sense of well being. So when developing customer benefit package for the Olive Garden, General Mills opened its sample facility in a failed steakhouse in Orlando, FL, in 1982. They researched 1000 restaurants for recipes, held 5000 interviews with consumers, and cooked more than 80 pots of spaghetti sauce. So, when General Mills started the process design phase they developed videotapes of how each job was done in order to train the new employees, they even created the singing waiters lyrics.
Another example of the development stage is The Swiss watch consortium, (SSIH) has dominated the world market for many years. In the 1970's they began to loose market share so they developed quartz movements in the hope that it would allow them to re-enter the market. The company held back their new technology and their competitors who were much smaller and had fewer resources outmaneuvered SSIH. Seiko, a competitor, made a daring decision to substitute the quartz watch for its existing mechanical watches. Because SSIH didn't introduce the quartz watch first they lost large amounts of market share and eventually went under.
Products are initially conceptualized to provide a particular capability and meet identified performance objectives and specifications. Given these specifications, a product can be designed in many different ways. The designer's objective must be to optimize the product design with the production system. A company's production system includes its suppliers, material handling systems, manufacturing processes, labor force capabilities and distribution systems.
Generally, the designer works within the context of an existing production system that can only be modified minimally. However in some cases, the production system will be designed or redesigned in conjunction with the design of the product. When design engineers and manufacturing engineers work together to design and rationalize both the product and production, it is known as integrated product and process design. The designer's consideration of design for manufacturability, cost, reliability and maintainability is the starting point for integrated product development.
A designer's primary objective is to design a functioning product within given economic and time constraints. However, research has shown that decisions made during the design period determine 70% of the product's costs while decisions made during production only account for 20% of the product's costs. Further, decisions made in the first 5% of product design could determine the vast majority of the product's cost, quality and manufacturability characteristics.
























OVERVIEW OF PRODUCT AND PROCESS DESIGN

Product design begins with the prototypes of the product features. They may be built, tested and analyzed. Detailed design goes beyond engineering, with operations, and marketing, getting involved in assessing the design towards manufacturability, and marketability. Product characteristics are thought over with lists of specifications, formulas, and drawings.
Product designs change often and require changes in methods, materials, or specifications and they can decrease the defect rates. Change can increase the risk of making mistakes so; stable product and service designs can help reduce internal quality problems. Changes to designs have the potential to increase the market share. Final decisions are made with regard to the inputs, operations, work flows, and methods which are use to make the product.
Process design that is used to produce a product or service is greatly affected by quality. The key to obtaining high quality in process design is concurrent engineering. Concurrent engineering is where operations managers and designers work closely together in the beginning phases of product and service design to ensure that production requirements and process capabilities are efficient.
Another dimension of quality related to product design is reliability. Reliability refers to the probability that the product will be functional when used. Some products can be designed with extra components so that if one component fails another one may be activated.
An example of product and process design is the alterations made to U.S. automobiles that are sold in foreign countries. Such alterations include switching the steering column to the right side. To accommodate left handed operations such as windshield wipers and turn signals, the manufacturers must reverse the positioning of these controls. These changes are a part of the alterations needed to accommodate foreign standards for traffic safety. This example is just one way manufacturers keep in mind the detailed process of product design and how important it is to adjust designs in changing environments.









Concurrent Engineering
What is concurrent Engineering?
Concurrent Engineering is a systematic approach to the integrated, concurrent design of products and their related processes, including manufacturing and support. Concurrent engineering forces the developer to consider the elements of the product life cycle from start to finish. This includes quality control, cost, scheduling, and user requirements.
Concurrent engineering brings together design engineers, manufacturing engineers, buyers, quality specialists, and information technology specialists. They form cross-functional teams that are responsible for implementing new technology. The teams fill the gaps between research and development and between development and manufacturing. Concurrent engineering shortens the time to market and allows the firm to meet time-based deadlines and quality competition better. The teams take a broad, systematic outlook in choosing technologies to pursue.
The basic tenet of concurrent engineering is the mixing of processors, human beings, tools, and methods to support product development. Concurrent engineering includes aspects from object-oriented programming, constraint programming, visual programming, knowledge-based systems, hypermedia, database management systems, and CAD/CAM.
Concurrent engineering involves the interaction of diverse group of individuals who are scattered over a wide geographic range. There are certain technological concepts to enable effective and complete communication among the groups that must also become organized into concurrent layers. To maintain or exceed the current level of software development productivity distributed information sharing and collaborative/cooperative work are important. Concurrent engineering takes advantage of shared information and allows simultaneous focus on different phases of the software development life cycle. Many existing World Wide Web (WWW) capabilities could support a wide area concurrent engineering environment.
There must exsist a strong level of communication between the developers and end-users for a concurrent engineering approach to be effective. A customer is both internal and external to the development process in the context of concurrent engineering. Each member of the concurrent engineering staff is an internal customer for intermediate products during development. Errors are detected prior to being implemented in the product by paying attention to all aspects of the design at each phase. A strong information sharing system, an iterative process of redesigns and modifications, trade-off analysis for design optimization, and documentation of all parts of the design that integrated design process must include.
Some Benefits of Concurrent Engineering
• Budget...With good communication and teamwork, there is little, if any, price change
• Quick to Market...Enabling tools to be completed faster than normal, your products get to market and contribute to the bottom line faster
• Workflow...Careful project planning encompasses communication of information exchange.

Design for Manufacturability
People often think of "design" as relating only to the finished product. Things like:
• What does it do?
• How heavy is it?
• What does it look like?
• What does it do?
• How heavy is it?
• What does it look like?
• Who will buy it?
• How much will they pay?

But "design" also influences and refers to issues regarding what technology or methods will be used to assemble it:
• Is the layout simple and straight-forward?
• Can it be built on automated equipment?
• Are the components and/or materials rare or plentiful, reliable or prone to failure, expensive or reasonable?
• Can it be tested during the manufacturing process?
The items that can be addressed in Design for Manufacturability include:
• General board size and configuration
• Placement area shape, size and orientation
• Component package style
• Component orientation
• Component clearance
• Media that the components come in
In the past, products have been designed that could not be produced. Some products have been released for production that could only be made to work in the model shop. Prototypes were built and adjusted by highly skilled technicians to assist the products in the model shops. Effective product development must go beyond the steps of acquiring and implementing product and process design technology as the solution. Product development must address management practices to consider customer needs. Manufacturers may achieve this by designing those requirements into the product, and then ensuring that both the factory and the virtual factory (the company's suppliers) have the capability to effectively produce the product.
Design for Manufacturability and Integrated Product Development may require additional effort early in the design process. However, the integration of product and process design through improved business practices, management philosophies and technology tools will result in a more producible product to meet customer needs, a quicker and smoother transition to manufacturing, and a lower total program/life cycle cost.

The ultimate way to distinguish a company's capabilities is through an increasingly competitive world, product design and customer service. Design for Manufacturability and Integrated Product Development concepts will be critical because of the growing importance of product design. It will be the key to achieving and sustaining competitive advantage through the development of high quality, highly functional products that are effectively manufactured through the integrated product and process design.
The application of design for manufacturability must consider the overall design economics. It must balance the effort and cost associated with development. Refinement of the design to the cost and quality leverage can be achieved with the balance of effort and cost as well. In other words, greater effort to optimize a products design can be justified with higher value or higher volume products.
Design effectiveness is improved and integration is facilitated when:
• Fewer active parts are utilized through standardization, simplification and group technology retrieval of information related to existing or preferred products and processes
• Production is improved through incorporation of design for manufacturability practices.
• Design alternatives are evaluated and design tools are used to develop a more mature and producible design before release for production.
• Product and process design includes a framework to balance product quality with design effort and product robustness









Computer Aided Design (CAD)

Computer Aided Design (CAD) is the use of computers to assist the design process. Specialized CAD programs exist for many types of designs: architectural, engineering, electronics, roadways, and woven fabrics. CAD programs usually allow a structure to be built up from several re-usable 3-dimensional components. The components (such as gears) may be able to move in relation to one another. It is possible to generate engineering drawings to allow the final design to be constructed.
CAD software is commonly used for drafting architectural and engineering drawings. It can also be used for making technical illustrations of any kind.

CAD enables you to prepare fast and accurate drawings and provides flexibility to change drawings with minimal effort. In recent years, many professionals have switched to CAD to enjoy its precision and creativity. Today, many educational institutions include CAD as part of their academic curriculum. As a result, CAD knowledge has become very important to all professionals involved in the field of design and drafting



Value Analysis
Value analysis is a systematic effort to reduce cost or improve the performance of products or services, either purchased or produced.
There a few things that value analysis does when an item is produced: it examines the materials, processes, information systems, and the flow of materials involved.
Benefits
• Reduced production
• Reduced materials
• Reduced distribution costs
• Improved profit margins
• Increases customer satisfaction
• Increases employee moral (teams are involved in purchasing, production, and engineering from both the firm and major suppliers)
Questions that should be addressed by employees and suppliers
• What is the function of the item?
• Is the function necessary?
• Can a lower cost standard part that serves the purpose be indentified?
• To achieve a lower price, can the item be simplified, or its specifications relaxed?
• Can the item be designed so it can be produced more efficiently or more quickly?
• Can features that the customer values highly be added to the item?
Value analysis should always be a part of a continuous effort to improve the performance of the supply chain and increase value for the customer.
Value analysis can focus on the internal supply chain; however, it would benefit more if it is applied to the external supply chain.
Early supplier involvement is an approach that many firms are using. This program includes suppliers in the design phase of a product or service. Suppliers provide useful suggestions for design changes and material choices that will result in more efficient operations and higher quality.
Pre-sourcing involves higher involvement of suppliers. Here, the suppliers are selected early in the developmental process and are given significant responsibility for the design of certain components or systems. Pre-source suppliers have additional responsibility for costs, quality, and on-time delivery of the items produced.
For example:
In the automotive industry, suppliers play an important role in value analysis. In the case of Chrysler's supply chain, competitors are designing and introducing models more quickly, which pressured Chrysler to focus more on their value analysis in their supply chain. Chrysler wanted suppliers to have more involvement, so they introduced S.C.O.R.E (Supplier Cost Reduction Effort). They hoped this would encourage, review, and act on suppliers ideas for quicker and fairer improvements and share the benefits of those ideas with the suppliers.
Chrysler's value analysis proved to be beneficial. They reduced the product development cycle time, which enabled them to produce six new vehicles. It also put Chrysler in a better cost position compared to its competitors.

COST WHILE DESIGNING A PRODUCT
INTRODUCTION
A competitive product must address factors such as cost, performance, aesthetics, schedule or time-to-market, and quality. The importance of these factors will vary from product to product and market to market. And, over time, customers or users of a product will demand more and more, e.g., more performance at less cost.
Cost will become a more important factor in the acquisition of a product in two situations. First, as the technology or aesthetics of a product matures or stabilizes and the competitive playing field levels, competition are increasingly based on cost or price. Second, a customer's internal economics or financial resource limitations may shift the acquisition decision toward affordability as a more dominant factor. In either case, a successful product supplier must focus more attention on managing product cost.

The management of product cost begins with the conception of a new product. A large percentage of the product's ultimate acquisition or life cycle costs, typically seventy to eighty percent, are determined by decisions made from conception through product development cycle. Once the design of the product has been established, relatively little latitude exists to reduce the cost of a product. Decisions made after the product moves into production account for another ten to fifteen percent of the product's costs. Similarly, decisions made about general and administrative, sales and marketing, and product distribution activities and policies account for another ten to fifteen percent of the product's cost.

When a company faces a profitability problem and undertakes a cost reduction program, it will typically reduce research and development expenditures and focus on post-development activities such as production, sales, and general and administrative expenditures. While not suggesting that these are inappropriate steps to take, the problem is that it is too late and too little. Most of the cost structure in a company has been locked into place with the design decisions made about the company's products. A cost reduction or profitability program has to start with the design of the company's products at the very beginning of the development cycle.
VARIOUS TYPES OF COSTS THAT ARE INCURRED

Recurring production cost = production labor + direct materials + process costs + overhead + outside processing

Non-recurring costs = development costs + tooling

Product costs = Recurring production costs + allocated non-recurring costs

Product price or acquisition costs = Product costs + selling, general & administrative + warranty costs + profit

Life cycle costs = Acquisition costs + other related capital costs + training costs + operating costs + support costs + disposal costs
TRADITIONAL APPROACH
In many companies, product cost or life cycle cost considerations are an afterthought. Costs are tallied up and used as the basis for determining the product's price. The primary focus is on product performance, aesthetics, or technology. Companies may get by with this approach in some markets and with some products in the short term, but ultimately competition will catch up and the product will no longer be competitive.

In other companies, cost is a more important factor, but this emphasis is not acted upon until late in the development cycle. Projected costs of production are estimated based on drawings and accumulated from quotes and manufacturing estimates. If these projected costs are too high relative to competitive conditions or customers requirements, design changes are made to varying degrees to reduce costs. This may occur before or after the product has been released to production. The result is extended development cycles and added development cost with these design iterations.

In some organizations, development costs receive relatively little attention as well. There may not be a rigorous planning and budgeting process for development projects. Budgets are established without buy-in from development personnel resulting in budget overruns.
DESIGN TO COST
Effective product cost management requires a design to cost philosophy as its basis since a substantial portion of the product's cost is dictated by decisions regarding its design. Design to cost is a management strategy and supporting methodologies to achieve an affordable product by treating target cost as an independent design parameter that needs to be achieved during the development of a product. A design to cost approach consists of the following elements:
• An understanding of customer affordability or competitive pricing requirements by the key participants in the development process;
• Establishment and allocation of target costs down to a level of the hardware where costs can be effectively managed;
• Commitment by development personnel to development budgets and target costs;
• Stability and management of requirements to balance requirements with affordability and to avoid creeping elegance;
• An understanding of the product's cost drivers and consideration of cost drivers in establishing product specifications and in focusing attention on cost reduction;
• Product cost models and life cycle cost models to project costs early in the development cycle to support decision-making;
• Active consideration of costs during development as an important design parameter appropriately weighted with other decision parameters;
• Creative exploration of concept and design alternatives as a basis for developing lower cost design approaches;
• Access to cost data to support this process and empower development team members;
• Use of value analysis / function analysis and its derivatives (e.g., function analysis system technique) to understand essential product functions and to identify functions with a high cost to function ratio for further cost reduction;
• Application of design for manufacturability principles as a key cost reduction tactic;
• Meaningful cost accounting systems using cost techniques such as activity-based costing (ABC) to provide improved cost data;
• Consistency of accounting methods between cost systems and product cost models as well as periodic validation of product cost models; and
• Continuous improvement through value engineering to improve product value over the longer term.


TARGET COSTING AS A FOUNDATION
Executive management, marketing, program/product managers, and development team personnel all need to have an understanding of customer affordability constraints or competitive market place requirements. Everyday customers buy products with functions, features and performance in excess of their needs and wonder how much is money is wasted on these unneeded capabilities. A keener awareness of design to cost requirements is needed. This happens when product development team members and executive management have direct contact with customers to understand their true needs and hear their sensitivity to costs directly, or when they are exposed to competitor's product pricing in the market place.

Based on this awareness of customer affordability or design to cost requirements, cost targets should be formally established. These targets should be developed based on pricing formulas and strategies and consideration of price elasticity. Prices and target costs will also have to consider projected production volumes and amortization of non-recurring development costs. In a more complex product or system, the top-level target cost will need to be allocated to lower level subsystems or modules. This will establish a measurable objective for a product development team where multiple teams are involved in a development project.

In an environment where development cost is significant relative to total recurring production costs, more attention will need to be paid to managing these non-recurring development costs. Non-recurring development cost will be a function of the extent of new product and process technology and the extent of use of new materials, parts and subsystems. If product is an evolutionary step with minimal development risk, non-recurring development costs will be lower. The use of standard parts and modules from other existing products will also lower non-recurring development costs. This suggests a strategy of not letting product and process technology application get too far ahead of customer affordability requirements.

Product development team members should buy-in to or commit to these product cost targets and development budgets to improve the chances of meeting these objectives. When empowered product development teams actually develop these budgets and targets, a sense of commitment to these budgets or targets develops. If the budgets or targets are established by someone outside the product development team (e.g., by a product or program manager, a management team, a system integration team, or a project engineer), the targets and budgets should be carefully reviewed with the team members to insure they understand these cost objectives and the assumptions behind them. While competition will generally dictate that stretch goals be established, these goals should be accepted by the team as achievable.



COST MODELS AND COST DATA
Once a team has a set of requirements and a cost target established, they will begin exploring alternatives as part of the design process. In the absence of other information, they will tend to evaluate a product concept primarily based on its performance merits and, at best, secondarily consider a subjective estimate of the relative costs of the design alternatives. Ad-hoc cost studies or trade studies may be prepared for significant issues, but tools to regularly support this process are lacking. Tools and information need to be provided to a product development team so that they can more proactively and objectively consider the cost implications of various design approaches on a regular basis. A product cost model or life cycle cost model provides an objective basis for evaluating design alternatives from a very early stage in the development cycle.

As the organization proceeds through the design of both product and process, the product cost model is used to project and accumulate product costs to use as a factor in evaluating design alternatives and to refine the design to meet cost targets. If it is determined after extensive evaluation that the product requirements cannot be achieved at the target cost, the requirements and targets will need to be re-evaluated and modified.

Early in the development cycle, the product cost model will be based primarily on characteristics of the product design with relatively little consideration of the actual manufacturing process. The model will be driven by general design parameters, product/part characteristics, and critical parameter tolerances. The model will be implicitly based on assumptions about existing processes and process relationships to types of materials, sizes and tolerance requirements.

Later in the development cycle, a different type of product cost model will be used that will consider the specific manufacturing processes. This type of model will be built around existing processes where relatively good historical cost data should exist. On occasion, new manufacturing processes will need to be considered. Data will need to be gathered as a basis for creating or extending the product cost model for the new process(es). Information to support this model development can be obtained from equipment suppliers, other users of this manufacturing process, facility engineers, and manufacturing engineers.

Cost data will also need to be obtained for many purchased parts and sub-assemblies. This information may be available in the form of catalog prices or supplier quotations. However, to support cost projections much earlier in the development cycle, a close working relationship with the company's supplier base will allow preliminary cost projections to be obtained without the formalized commitment of a quotation. The supplier relationship and company information needs may even develop to the point that the company works with the supplier to develop a supplier cost model based on the supplier's process capabilities.

A company's initial attempt with a product cost model may utilize a spreadsheet program or a bill of material cost roll-up capability. The focus is on accumulating and tracking estimated material, part and assembly costs. This summarization capability may start with cost estimates and update the estimates with quoted prices or catalog prices for purchased items or manufacturing's estimates based on preliminary drawings for fabricated items and assemblies.

Over time, a more sophisticated product cost model should be developed that will project costs based on the characteristics of parts and the overall product design. This type of cost model might be based on commercially available design for manufacturability (DFM) or design for assembly (DFA) software packages. These systems typically generate an estimate of fabrication or assembly labor time and costs or machine cycle time. and costs as part of their capabilities. In addition, there are commercially available cost models that allow a company to develop a custom model of their manufacturing processes and project even more exacting cost estimates based on their product or part characteristics. These individual packages or modules will be oriented toward a limited part or product domain, e.g., manual or automated assembly, printed circuit boards, sheet metal, injection molding, casting, etc. Multiple modules will typically be needed to support overall product cost modeling. In addition, a database reporting capability or spreadsheet will be needed to accumulate the many individual elements of cost from these various cost modeling system components so that effective overall trade-off's can be made.

Over the course of the development cycle, several different costing tools may be used by an organization. In the early stages of product development, an estimating system may be used to respond to a customer request for quotation or request for proposal or to develop an internal estimate to prepare a cost justification for the development project to management. This cost model would be based on parametric or analogy techniques. Parametric techniques would take general characteristics about the product such as size, weight, number of functions, etc., and use these parameters to develop a general cost estimate. Analogy techniques would take a similar product's cost and use a "same as except for" approach to develop a cost estimate based on the cost of an existing item.

As the development cycle moves into the product design phase, cost models and DFM/DFA tools as just described would be used. These estimates would be more refined since more is known about the design of the product and its cost drivers. Once the product design is essentially complete, tools and methods such as computer-aided and manual process planning and tools to support the development of labor standards would be used to develop even more refined cost estimates. Finally, as the product moves into production, cost accounting systems would collect costs by product, assembly, part, and operation. These costing tools are illustrated below.

These costing tools should have a consistent basis for accounting for costs and a consistent set of rates. In addition, the organization should establish procedures to periodically validate the cost models by comparing the projected costs with actual costs and adjusting parameters in the model to yield projections closer to actual experience.

In some cases, life cycle costs may need to be considered as the basis for making design decisions. This will add to the complexity of a cost model. Data will need to be gathered on operating costs (e.g., facilities, training, manpower, fuel or energy consumption, etc.), maintenance costs, and disposal costs. While these costs can be modeled, historical data related to operations, reliability and maintenance often is needed. This means that a customer will need to provide this data or that the company have close working relationships with customers where this data is routinely gathered.

To support the operation of these cost models, cost data will need to be readily accessed. Some companies try to restrict access to cost data to prevent this information leaking out to competitors. This restricted access undermines a design to cost methodology and empowerment of the product development teams. This data needs to be made available to support cost modeling. Typical data required will be labor rates, overhead rates, learning curves, efficiencies, historical and projected parts costs, and escalation projections for labor and materials.

Traditional approaches to allocating overhead or burden costs generally based on direct labor. However, direct labor is becoming an insignificant cost component in many products. Further, there is frequently a lack of understanding of sunk costs and fixed versus variable indirect costs. All of this has led to distortion of overhead cost allocations and inappropriate design and sourcing decisions. As companies move toward activity-based costing, the quality of the cost data will improve. Costs will be more closely based on the consumption of resources and the aberrations associated with allocating indirect costs will diminish.
DECISION-MAKING
In the absence of product cost models and product development teams, each functional organization will make decisions from their own perspective, trying to manage the elements of cost that they are responsible for. For example, decisions to minimize non-recurring design engineering expenditures may result in a less producible product, driving up material and labor costs in manufacturing. Decisions to minimize tooling capital expenditures may also have the same effect in manufacturing costs. Test engineering may try to minimize its non-recurring development budgets and capital expenditures resulting in a less automated test process and higher recurring test costs for production verification.

Product development teams provide the organizational mechanism to bring the various disciplines together to optimize product costs from an enterprise perspective. Cost models provide the means for the team to objectively consider the implications of various development decisions. A company operating philosophy that emphasizes cost as a factor in the development decision-making process is a final requirement.

Access to product cost projections early in the development cycle will improve decision-making about design alternatives and lead to refinement of the design to come closer to the established cost targets. These costs projections will aid decisions about the design of the manufacturing process as well, focusing attention of elements of the product costs that do not meet the target and allowing consideration of alternative processes while it is still early enough in the development cycle to introduce new processes. The key is to emphasize management of product costs during development, not merely accumulating costs as designs are completed.
SUMMARY
Since the decisions made during the product development cycle account for seventy to eighty percent of product costs, product cost management must begin with the start of product development. Product development personnel must understand competitive pricing or customer affordability requirements. Target costs must be established at the start and used to guide decision-making. Development personnel must operate as entrepreneurs in making hard decisions about the product and process design to achieve target costs. Cost models must be provided to support decision-making early in the development cycle. And the quality of information and the cost models must be continually improved and refined. This increased focus on product or life cycle costs will lead to significantly reduced costs and more satisfied customers.
The costs of poor quality assurance
Putting out products significantly poorer than their predecessors has both direct and indirect costs. The most direct cost is support. As soon as new bugs escape the factory, the phone lines are flooded. It’s bad enough when the early adopters snatch up Version 1.0 and start immediately complaining. Most of us eventually learned to wait around for Version 1.1. Dish Network customers don't have that option, though, because they release their products on their subscribers without any notification or choice, by downloading the new software into unsuspecting receivers overnight. There is little or no ramp-up. All of a sudden, Support is getting a whole bunch of phone calls, and they don’t even know about the problems, let alone have work-arounds.


Other costs include upsetting the workforce. I’ve worked on new products that, because of rushed schedules or poor QA, were disasters. Not only is everyone thrown into a tizzy trying to put out version 1.01, productivity plummets from the combination of stress, depression, and embarrassment. (I can’t even imagine what it must feel like to be the designers who cleaned up so many parts of the 721’s interface in the 115 release, only to see their good work indirectly cripple the product due to the lack of systematic testing.)

Then, there’s the problem of millions of people telling their friends about Dish's unreliable, cantankerous receivers. The average Joe cannot differentiate between bad hardware and software. All he knows is that it used to work and now it doesn’t.

Which leads to another direct cost? When I reported an inability to watch shows off-line, Dish Network’s Level One support people immediately announced that there must be a hardware problem with my 721, and began to arrange for a replacement unit to be shipped to me. (This is not the first time this has happened.) It was only after I insisted that I was looking at a software problem and demanded to be switched to Advanced Support that I was able to get someone capable of exploring the actual problem.

I don’t know what percentage of units returned to Dish turn out not to have anything wrong with the hardware, but my guess, from my own experience over the years, is that the figure would be high, a direct result of improperly-tested software being released on an unsuspecting public and an equally-unsuspecting support staff.
Of course, when you have a high percentage of properly functioning hardware being returned, units with genuine, but intermittent, problems will also tend to judged as being OK, absent the intermittent problem revealing itself at the moment of service. These will then be recycled to users, thereby replacing good receivers with a temporary software problem with bad receivers with real, but intermittent problems. If proper tracking is not done, this cycle can repeat itself over and over before a user finally defenestrates the offending receiver.

ACCESSIBLE DESIGN
What is Accessible Design?
"Accessible Design" is the term used for the process of extending mass market product design to include people who, because of personal characteristics or environmental conditions, find themselves on the low end of some dimension of performance (e.g., seeing, hearing, reaching, manipulating). Accessible Design is not (or should not be) separate from standard mass market design. Rather it is an extension or elaboration of general design principles to cover a wider range of human abilities/limitations than has traditionally been included in product design.
Thus Accessible Design is a subset of what is termed Universal Design. Where Universal Design covers the design of products for all people and encompasses all design principles, Accessible Design focuses on principles that extend the standard design process to those people with some type of performance limitation (the lower ability tail of Universal Design).
Accessible Design is a balancing act. To begin with, we must acknowledge that it is not possible to design everything so that it can be used by everyone. There will always be someone with a combination of severe physical, sensory and cognitive impairments who will not be able to use it. However, it is equally unreasonable to rely on the existence (or development) of special designs for each major product to accommodate each one of the immense variety of disabilities (and combinations of disabilities). This makes it necessary to look toward a combination of approaches for meeting the needs of people with disabilities, ranging from the incorporation of features into products that will make them directly usable ("from the box") by more people with disabilities to the inclusion of features that make them easier to modify for accessibility.



Environmentally Friendly Design


Consumer demand and shorter product life cycles have given rise to an increasing volume which has increased the end-of-life products and packaging materials for disposal. Landfills are becoming increasingly scarce. Other disposal method ideas have now been developed. Responsible management of global energy and environmental resources is also gathering pace. If we adopt the "polluters pay" principle, more legislation and regulations will have to be formulated to require that manufacturers reclaim their waste, and reuse the recyclable fraction and then dispose of the residue, which can lead to extra costs. Customers are demanding products that are both energy efficient and environmentally safe. Manufacturers seek to manage their impact on the environment by reducing consumption of limited natural and energy resources. And also by re-using or re-cycling (see figure).




Example :

Product design


As one of the world’s largest IT companies, HP’s greatest impact on the environment is through our products. HP is committed to providing products and services that are environmentally sound throughout their life cycles. This chapter describes our efforts in product design, packaging, reuse and recycling.
Environmental impacts occur at every stage of the product life cycle: from product design, through manufacturing and transport, to use by customers and, finally, disposal at the end of a product’s life.
Managing these impacts is a complex challenge as well as an opportunity. We apply design expertise to create innovative products and services with reduced environmental impact. This aligns with our customers’ expectations of high performance, low cost and minimum environmental impact, and provides HP a potential source of competitive advantage. For example, flat panel displays, notebooks, multi-function handhelds and all-in-one printers use less material and are more energy-efficient than the desktop PCs and individual scan, fax, copy and print devices they replace for many customers. These newer products help reduce energy consumption, CO2 emissions and space used in transport, all of which result in lower environmental impact. HP ensures environmental design does not compromise other product requirements such as quality, reliability and price.

Design for environment

As one of the world’s largest consumer IT companies, a leading IT supplier to small and medium-size businesses and a leader in enterprise computing, HP’s largest impact on the environment is through its products.
The environmental performance of products is largely determined at the design stage. Through intelligent design we can reduce the environmental impact of our products, and that of our customers.
To accomplish this objective, HP established its Design for Environment (DfE) program in 1992.
Design-for-Environment (DfE) is an engineering perspective in which the environmentally related characteristics of a product, process or facility are optimized. Together, HP's product stewards and product designers identify, prioritize and recommend environmental improvements through a company-wide DfE program. HP's DfE guidelines derive from evolving customer expectations and regulatory requirements, but they are also influenced by the personal commitment of its employees.
The Design for Environment program has three priorities:
• Energy efficiency – reduce the energy needed to manufacture and use our products
• Materials innovation – reduce the amount of materials used in our products and develop materials that have less environmental impact and more value at end-of-life
• Design for recyclability – design equipment that is easier to upgrade and/or recycle
HP's DfE guidelines recommend that its product designers consider the following:
• Place environmental stewards on every design team to identify design changes that may reduce environmental impact throughout the product's life cycle.
• Eliminate the use of polybrominated biphenyl (PBB) and polybrominated diphenyl ether (PBDE) flame-retardants where applicable.
• Reduce the number and types of materials used, and standardize on the types of plastic resins used.
• Use molded-in colors and finishes instead of paint, coatings or plating whenever possible.
• Help customers use resources responsibly by minimizing the energy consumption of HP's printing, imaging and computing products.
• Increase the use of pre-and post-consumer recycled materials in product packaging.
• Minimize customer waste burdens by using fewer product or packaging materials overall.
• Design for disassembly and recyclables by implementing solutions such as the ISO 11469 plastics labeling standard, minimizing the number of fasteners and the number of tools necessary for disassembly.
Product Design for the Virtual World
Online gaming is not all violence and destruction. Building on the momentum of alternative worlds such as Myst and Sim City the developers of Second Life have taken the ideas of virtual worlds to the next level. A world with is own commerce and community where creation and character rule. “Second Life is what MySpace wants to be,” he says. “People are inventing new uses for it all the time. And the e-commerce aspect of it is going to be huge.” Although no major brick-and-mortars are doing business from within SL yet, they are taking note. The banking giant Wells Fargo built its own branded island inside SL, designed to train young people to be financially responsible. Wal-Mart, American Express and Intel are looking at using SL for their corporate training. And why not? With its natural interactivity and open platform for creation, Second Life, or something like it, may very well be the next generation of the Web.
For example, if I was online banking in SL, I wouldn’t have to browse through several static screens of text. I could just walk into a virtual bank, stroll up to a teller, and deposit real-life money the newfangled, old-fashioned way: by talking to a person. Like the Web, all but the basic infrastructure in SL is built by the people who populate it. Want a conference room where you can swap blueprints with a team around the world? Create one, and other avatars can come inside. Want to sell your band’s music? Build a jukebox, fill it with MP3s, and charge SL residents in Linden dollars (SL’s currency) to download them.
Design Reviews:
A design review is a meeting involving the product team and selected experts, consultants and managers. The purpose of a design review is to take a hard critical look at the current design to determine if the project should continue and, if it does continue, how to make the design better. The product team should present their design to the group and field any questions. They should remember when doing this that they are justifying their survival as a team as well as justifying the continuation of the project. Then, the supervising manager of the project should conduct the critical review process using the product design specification as a guide...
• will the design meet expected marketing goals? (marketing audit)
• does the design meet the established performance goals? (quality audit)
• does the design address expected customer wants and needs? (quality audit)
• can the design be produced on schedule? (manufacturing audit)
• is the design as simple and error-free to produce as it could be? (manufacturing audit)
• can the design be produced with increased safety to workers? (safety audit)
• will the design mitigate existing liability exposure or create new liability exposure? (safety audit)
• does the design facilitate projected service and maintenance goals? (life cycle audit)
• is the product recyclable at the end of its useful life? (life cycle audit)
• does the product production, use or disposal pose any environmental problems? (environmental audit)
A design review is a rigorous self-evaluation of a design that is used to determine if resources are allocated wisely, if goals will be met, and if the best design possible will be used.
A quality audit is done to identify potential problems that must be addressed to improve quality. A product quality audit should be based on the voice of the customer and benchmark data from competing products. A process quality audit should be based on the quality of the product produced by the process and should involve substantial operator input.
Many rules and procedures outdate quickly. All rules and procedures, except those mandated by law, should be regularly evaluated. When a rule or procedure has outlived its usefulness, discard it. Simplify everything all the time! Rules and procedures are usually put into place to solve some current problem, although quite often they produce unwanted side effects later on. If the problem is no longer a problem, perhaps the rules and procedures it spawned are no longer necessary. If the side effects are more of a problem than the original problem, the rules and procedures that caused them should be reviewed and revised, or eliminated.
EXAMPLE:
APPLE COMPANY:
From designing for energy efficiency to using recyclable materials, Apple’s design philosophy focuses on the future of our products and the future of our planet.

Innovative and efficient
Apple strongly believes that reducing the environmental impact of our business starts with the design of our products. We set high standards — based on our own requirements and those set by programs such as ENERGY STAR® — in an effort to create products that offer excellent environmental performance throughout their life cycle.

Packaging for the fifth generation iPod was reduced by 69% compared with the previous generation.
The iMac and Mac mini are great examples of ultra-efficient design, and illustrate the ways in which Apple continually refines products to further improve environmental performance. Both products also feature built-in wireless technologies such as AirPort and Bluetooth, reducing the need for PVC-insulated cabling. The Apple Product Environmental Specifications page details the environmental attributes of all our computers, monitors, and servers.
Less is more
Their designs also help to reduce energy consumption, minimize the use of environmentally damaging substances, and optimize the useful life of our products — all of which lead to a smaller environmental footprint. Lower energy consumption reduces electricity demand and alleviates the detrimental effects of power generation. Using recyclable materials cuts the amount of waste going into landfill. And restricting environmentally damaging substances makes products safer for consumers and businesses during their useful life and beyond.
Examples of continuous improvement of iMac design
The iMac design has continuously improved generation after generation, resulting in increased material efficiency, decreased packaging mass and volume, and decreased energy consumption.

Reducing packaging
 Packaging for the current-generation iMac uses 59% less plastic and 20% less paper than the iMac G4 flat panel, while taking up 40% less space.
 The 15.4-inch MacBook Pro packaging is 45% lighter and uses 45% less volume than the 15-inch PowerBook G4.
 The packaging volume of our fifth generation 30GB and 80GB iPod was reduced by 69% from earlier models. This enables 120 more units to be shipped per pallet compared to the fourth generation 30GB iPod.
Apple recently reduced packaging for the iPod and many software titles by more than 50% — eliminating hundreds of thousands of pounds of packaging waste.
Recyclable materials
Apple uses highly recyclable materials such as polycarbonate for iMac and MacBook enclosures and aluminum for MacBook Pro, Power Mac G5, and Cinema Display enclosures. The use of these high-value materials encourages recycling, which helps to minimize waste at the end of the product’s life.
Dematerialization
Apple’s ultra-compact product and packaging designs lead the industry in material efficiency — reducing waste and energy consumption and maximizing shipping efficiency.
Responsible Manufacturing
Apple’s record of restricting harmful substances goes back well over a decade? Learn more about substances currently restricted or banned in Apple’s products, packaging, and? Manufacturing processes.

The purpose of packaging and labels
• Protection against physical impact on object - The objects enclosed in the package may require protection from, among other things, damage caused by physical force, moisture, oxygen, rain, heat, cold, sunlight, pressure, airborne contamination, automated handling devices, or any combination of one or more of these.
• Protection against dust and dirt - In a modern supply chain products are subject to different environments. They start packed in boxes and stacked on a pallet. In about 80% the products end up in a distribution center for commissioning and fine distribution to the store where the product will be sold. During this period the physical protection also applies to dust and dirt that can easily settle on the consumer packaging. Especially products packed in plastic containers like shampoos, detergents and ketchups due to static charging easily attract dust and dirt. As a consumer we don't want to get dirty hands when picking up a product from the shelf. Transportation packaging keeps our products clean and neat until the shelf and helps cut cleaning costs on the shop floor.
• Agglomeration - Small objects are typically grouped together in one package for reasons of efficiency. For example, a single box of 1000 pencils requires less physical handling than 1000 single pencils. Alternatively, bulk commodities (such as salt) can be divided into packages that are a more suitable size for individual households.
• Information transmission - Information on how to use, transport, or dispose of the product is often contained on the package or label. An example is pharmaceutical products, where some types of information are required by governments.
• Marketing - The packaging and labels can be used by marketers to encourage potential buyers to purchase the product. Package design has been an important and constantly evolving phenomenon for dozens of years.
• Reducing theft - Some packages are made larger than they need to be so as to make theft more difficult. An example is software packages that typically contain only a single disc even though they are large enough to contain dozens of discs. These packages may also be deliberately difficult to open, to hamper thieves from removing their contents without drawing notice. Packages also provide opportunities to include anti-theft devices, such as dye-packs or electronic article surveillance tags, that can be activated or detected by devices at exit points and require specialized tools to deactivate. Using packaging in this way is a common tactic for loss prevention.
• Prevention of pilferage and tampering - Products are exposed to many contacts in the supply chain. Persons handling could steal products (pilferage), replace full products with empty ones or add unwanted contaminants to the contents (tampering). Packaging that cannot be re-closed or gets physically damaged (shows signs of opening) is very helpful in the prevention of these acts. The flaps of corrugated and cardboard boxes are therefore glued in such a way that any opening irreversibly damages them. The over packaging of certain objects has led to a phenomenon known as wrap rage.

Product packaging design can be the most important aspect of your consumer product. Packaging design conveys to the customer the most important features of your product as well as getting the customer to SEE your product amidst all the other myriad of competitor’s products. For “big box” retailers it is also important to have the smallest footprint possible to maximize their return on investment (ROI) while also conveying a message good enough to make your product sell.


CONCLUSION:

Thus product design is a very complex process and should be done properly in order to yield best results. A company can succeed i.e its product will succeed in the market if and only if it has a good product design which is liked by the consumers. The product needs to be designed very well in order to attract the consumers and increase demand. The concept of product design has to be accepted and used by each and every company.
The most important thing about product design is its processes and the various steps. With the help value analysis, concurrent engineering, computer aided design etc , a product can be designed to suit the various need of the consumers. In short, a product design is a tough job to be done taking care of various requirements of the people.
Hello Saana,

Here i am uploading Learning Objectives of Product Design and Process Selection, so please download and check it.
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