PRODUCTION DESIGN & DEVELOPMENT

UNIT - 1
CH- 5
 MEANING
• The marketing team identifies the need of the customer and the
operations designs the product to satisfy it. (Design affects the
quality of the product and consequently its ability to satisfy the
customer's needs.
• Poorly designed products may not meet the customer's needs, if the
design has a very high cost it may not be viable to recover the costs
through pricing.
• An effective design should match the attributes of the product or
service with the customer's requirements in a simple and cost
effective manner.
• The design process itself should not take too much time, else
competitors will capture the market. The design must be workable
 APPROACHES FOR DESIGN OF
PRODUCT
1. Traditional Approach-Traditionally, organisations tend to work in water tight compartments. The
product or service design involves the customer, the marketing department, product or service
designers, production or operations team, the purchase department and the suppliers.
• This approach suffers from lack of coordination and integration.
• The marketing team identifies the customer's needs and passes on the requirement to the design
team. They invariably feel that the requirements as projected by the marketing team are
unrealistic in terms of available technology and resources.
• They produce a design based on their perceptions. When the design is received by the
manufacturing team, they modify it further to suit manufacturing processes. T
• he purchase department poses its own problems about the difficulty of procuring materials as
specified in the design. The suppliers add to the confusion by expressing inability to supply to the
specifications. Each team modifies the design specifications to suit its requirements.
• This results in the product being substandard and not in conformity with the customer's needy.
 2. Concurrent Engineering Approach
• Concurrent engineering is the product design approach in which the design teams
are formed with representatives of all the departments concerned.
• Instead of following a sequential procedure where the product concept leads to
design specifications and then to manufacturing specifications and detailed
engineering and working drawings, different departments work concurrently on the
design.
• In concurrent design, the supplier is given broad specifications of the item and is
asked to prepare a prototype for testing. Details are worked out by the supplier
since he is part of the design team and is aware of the other implications.
• Concurrent design integrates the design and the manufacturing processes. Often,
design engineers may not be aware of the limitations or strengths of the
manufacturing process. The inclusion of manufacturing engineers in the design
team leads to better workable designs and reduces costs and time of reworking on
designs. Trade-offs in costs and design choices can be considered at an early
 3. Computer-aided Design Approach
• Computer-aided design (CAD) is a software which helps
the designer to make three-dimensional design of a
product on the computer and visualize the design from
various angles. The designs made on CAD can be seen
at different workstantions through intranets
simultaneously. Also, these can be sent to distant
locations using internets.
 STEPS IN DESIGN PROCESS
1. Idea generation-The design process starts with draft specifications of the product or service. Marketing team in
consultation with the customer must draw up product concept and performance specifications in as much detail as
possible. Ideas for new products and services or for improvements in existing products and services may come from
customers, research and development department, suppliers, salespersons, customer complaints or suggestions,
factory workers, and new technological developments.
The draft specifications should include the following:
a) Performance requirements including requirements of reliability and quality
b) Appearance or styling requirements
c) Probable quantity of product or service usage that is required 4. The time by which the product or service is
required
d) The likely price at which product or service will sell. This may initially be in the form of 'Price not to exceed...
e) Maximum cost of designing. This is important as the design cost has to be recovered through the price of the
product
f) Any special features that have to be incorporated such as statutory safety standards The draft specifications form
the basis of all subsequent activities and it is important that these are prepared carefully.
2. Acceptance or feasibility study-The draft specification is tested for its
feasibility and then either accepted, modified or rejected.
An integrated design team will be able to perform this task much better than a
team consisting solely of design engineers
The feasibility study includes a market analysis, an economic analysis, and a
technical and strategic analysis.
The market analysis assesses whether the market demand is sufficient to justify
developing the product or service and the long term potential for the product.
The economic analysis determines the cost of production and its profitability
depending on its estimated selling price and sales volume.
• The technical analysis considers whether the product can be produced by the existing facility or any
new technology, new facilities will be required. It determines whether the existing capacity is sufficient
and the necessary labour skills, raw materials and other infra-structural requirements are available.
• The Strategic Analysis aspects such as core competencies and competitive priorities that the
company has laid down must also be considered while launching a product.
• 3. Execution or preliminary design-Once the product or service is found feasible and accepted for
designing, the execution of the design is undertaken.
• This involves making a number of models, testing them, modifying or revising them, retesting them
and so on till a viable design is produced. The design incorporates both form and functional design.
• The models produced may not conform to the specifications or may not perform as per the
specifications.
• Generally such differences occur because of problems of scale. The cost of producing a full fledged
scale model may be too much. and it may not be possible to make full scale models before the design
is finalised.
4. Translation or production design-This stage of the design process deals with how the
product will actually be made or how the service will actually be operated. This also includes
aspects of after sales service. 'Difficult to execute' designs result in poor quality products.
• Some products become too complex because of a large number of options and features,
and the customer is unsatisfied with them.
• For example, modern music systems and digital handy cams have so many features
incorporated that their instruction manuals run into over a hundred pages. The average
customer does not use most of the special features. They only add to the cost of the
product.
• Sometimes the design engineers are not aware of the production facilities. The design has
then to be modified to make it viable to produce. This results in delays. Integrated design
teams with adequate representation from the production floor will overcome this problem
amplification, standardisation and modular design are some of the recommended
approaches.
 DESIGN OF SERVICES
1. Intangibility
2. Perishability
3. Heterogeneity
4. Simultaneity
5. Service Concept
6. Service Package
7. Performance Specifications
8. Design Specifications
9. Delivery Specifications
 TECHNOLOGY & DESIGN
1. Computer Aided Design (CAD)-It is a software system that uses computer graphics
to help in creation, modification and analysis of a design. The software generates 2
dimensional or 3 dimensional images based on plan and elevation views. The images
can be rotated to view the object from any angle. The design can be modified. Built
libraries exist in the software to guide on the materials to be used, the colour scheme
and so on. The design can be modified. Once the design is finalised the software
generates drawings with dimensions and material specifications. This

2. Computer Aided Engineering (CAE)-Some CAD packages incorporate computer

aided engineering also. They are capable of analysing the design for its engineering
strengths and flaws. A finite element analysis can be performed. The components can
be subjected to various tests virtually on the computer and analysed for their
performance. For instance, the package can be used to test whether a car body and
chassis will be able to withstand a collision or an accident, Autocad is a software with
which the design can be optimised from an engineering point of view.
 TECHNOLOGY & DESIGN
3. Computer Aided Manufacture (CAM)-Computer aided manufacture refers to the
control of the manufacturing process by computers. CAD/CAM converts the CAD
designs into instructions for computer-controlled machines which may be coupled
with robotics to produce the product as designed.

4. Collaborative Product Commerce (CPC)-CPC incorporates internet technology to

share CAD generated product design files between various agencies concerned that
are geographically separated. The teams work on the design concurrently in real
time, reducing the time required for design, approval, making of prototypes testing
and finalising. The design engineers, the production engineers, the suppliers of raw
materials and subassemblies, and all others concerned with the product can use a
common virtual space to view, modify and test designs and can interact with each
other in real time even when they are not co-located. Quality of design and quality of
manufacture contribute to the success of any product. The product should be reliable
easily maintainable and have value. These aspects of the product or service are
 FACTORS DETERMINING THE PRODUCT
DESIGN
1. Customer’s Requirement
2. Production Facilities
3. Raw materials to be used
4. Cost
5. Quality Policy
6. Plant & Machinery
7. Reputation of the company
PRODUCT DEVELOPMENT PROCESS
 Idea Generation
• Ideas form the spine of the new product development. They stem from market opportunities and can be
innumerable. This stage involves creating a large pool of ideas from both internal and external sources using
numerous techniques.
• New Product Ideas From Internal Sources
• Research and Development: R&D department is a formal department of the business that includes experts with
the sole responsibility to conduct market research and analysis and generate new ideas.
• Employees: Employees are the ones who work closely with the product and the customers. According to
research, almost 45% of all new product ideas come from the employees.
• New Product Ideas From External Sources
• Customers: Customers are the most important sources to get new product development ideas. Their needs,
wants, and desires form the base of the market opportunity, and most of the time they know what they want.
Surveys, customer forums are excellent sources of new product development ideas.
• Channels Of Distribution: Since distributers work closely with the customers, they understand better what the
customer actually demands. They often give ideas for new product possibilities and can also help the company
with market information like new concepts, techniques, technology, and materials.
• Competitors: Competitor analysis is a great way to analyse how the market rate the existing players and what’s
missing in the market. This information is further used to develop new products.
• Others: Other idea generation sources include consultants, communities, government agencies, market
research firms, commercial laboratories, etc.
 Idea Screening
• While the purpose of idea generation is to create a large pool of ideas, this stage involves
evaluating the pool and drop as many ideas as possible from consideration. This is done by
determining and evaluating the ideas’ –
• Compatibility: Compatibility of the idea(s) with the overall business objectives.
• Relevance: Relevance of the ideas based on the current and predicted business environment
and the organisation’s goals.
• Assumptions: Validity of the assumptions the idea is based on.
• Constraints: Internal and external constraints that hinder the growth of the idea into reality.
• Feasibility: Feasibility of the idea according to the resources available.
• Value: The idea’s predicted return on investment.
• Risks: Internal or external risks that may hinder the idea’s progress.
• There’s a likelihood of two types of errors in the new product development process. The idea
screening phase acts as a filter to prevent the business from them.
 Concept Development And Testing
• An idea is different from a concept. While an idea is just a mental construct of
a business possibility or opportunity, a concept is an idea that has gone
through the process of fine-tuning and is less inconsistent.
• The concept is a presentable version of the product idea which takes into
consideration –
• Potential target audience
• Product usage
• Potential value propositions
• For example, a product idea could be a fitness centre. But a product concept
would be a fitness centre that focuses on providing Zumba classes to working
women offline in the morning and online in the evening.
• This step involves developing single or multiple concepts based on the
product ideas and testing them for their viability.
 CONT....
Concept development
• Possible product concepts for this electric car could be –
• Concept 1: An affordable electric car focused on working individuals who commute daily. This car can
be charged at home but isn’t viable for long-distance travel.
• Concept 2: A mid-priced electric car for environment-ocused millennials. The car has sporty looks, and
there are recharging points available.
• Concept 3: A high-priced electric SUV for high earning individuals who care about the environment.
Concept Testing
• Once the concept is developed, it is tested using several methods and processes like –
• Concept-test surveys: The planned target audience is asked to answer some product-related
questions. These answers are further analysed to test the viability of the concept.
• Prototype: A prototype is developed to understand the viability of the product better.
• Testing different concepts gives a clear picture to the management on which concept to take forward
and which to drop.
 Marketing Strategy Development
• Once a promising concept is finalised, the next step involves developing a
marketing strategy for the new product. The marketing strategy is divided into three
parts:

• The detailed description of the target market’s size structure and behaviours, the
planned value proposition, the product positioning strategy, and sales size, market
share and profit goals for the first few years.
• An outline of the pricing strategy, distribution strategy, and the required marketing
budget for the first year.
• The marketing mix strategy and the planned long-term sales and profit goals.
 Business Analysis
• Once the product and its marketing strategy is finalised, the next step involves the evaluation of
business attractiveness of this proposed product. This step of the new product development
process involves a review and analysis of the sales, costs, and profit projections for the new
product.

• In simple terms, this step evaluates the product as a business by reviewing –

1. Costs involved in producing, marketing, and selling.
2. Projected sales
3. Projected profits
4. The analysis is done either by conducting market surveys, consulting experts, or by analysing
the history of similar products. Once done, this analysis is then compared with the company’s
objectives, and the product goes into the production stage only if these factors satisfy the
objectives.
 Product Development
• Up to this point, the product only existed as a word description, a drawing, or a prototype. But
once the business analysis clears the product, the work is handed over to the research and
development department for actual product development.

• It may take days, weeks, or months to develop the final product as the product goes through a
series of testing phases (alpha testing and beta testing) to validate all the assumptions and
incorporate everything that was promised during the previous stages.

• Alpha testing is testing the product within the firm to make sure it fits the standards set.
• Beta testing involves launching an MVP or a test version in the market to validate the
product-market fit. However, it doesn’t involve testing the final product or marketing strategy.
 Test Marketing Or Market Testing
• Once the product development is completed, the product is then dressed up with a brand identity and released in a selected market segment as a
pilot for testing.
• This step involves the company to test both the final product and its entire marketing and branding strategy, including
• Positioning strategy,
• Pricing strategy,
• Communication strategy,
• Promotion strategy, and
• Distribution strategy.
• The product is developed in full scale only after test marketing shows positive results. There are three types of test markets –
• Standard test markets: These are small representative markets (for example, a single city instead of the full state) where the firm conducts a full
marketing campaign and uses store audits, customer surveys, distributor surveys, and other methods to analyse performance. The results are
used to predict full-scale campaign’s performance, discover unsolved problems, tap untapped opportunities, and fine-tune the marketing
program. The biggest disadvantage of standard test markets is that the competitors get to know about the new product and its marketing
strategies before the actual launch.
• Control test markets: These are artificial testing venues like panels of stores that have agreed to carry new products for a fee. These artificial
testing venues are less expensive than the standard test market and provide a faster analysis (of both the product and its competitors). Still,
there’s a risk of competition gaining access to the new product.
• Simulated test markets: These are events where the firm creates a shopping environment and analyse customer behaviour with respect to the
new product and its competitors. This test market also lets the researchers interview customers.
 Commercialisation
• Test marketing provides the management with the information needed to make the final decision
about the product launch. Once the final decision is made and the product is decided to be
launched in the market, the new product goes into the final stage -commercialisation or
introduction, and is finally produced in the needed quantity.
• This stage involves the highest costs as
• Manufacturing units are leased or purchased
• Advertising and communication campaigns are executed
• Sales promotion and other marketing efforts are executed to develop an initial demand
• Several important decisions are taken during the commercialisation stage like –
• Introduction timing: The best time to launch the product.
• Introduction place: The decision about the place. Should it be launched in a single market or
should it be launched simultaneously in multiple markets?
• Future strategies: What should be the strategies once the product is launched in the market.
 FACTORS INFLUENCING PRODUCT
DEVELOPMENT
1. Cost
2. Materials
3. Customer’s Requirements
4. Industrial Production
5. Company Identity
6. Aesthetics
7. Functions
8. Environment
 FACTORS INFLUENCING PROCESS
DESIGN
1. Capital intensity-Processes may be labour-intensive or capital-intensive. Automation, though
costly, increases productivity. However, the cost of automation must be weighed against the
advantages accrued. If the organisation is not producing products in large volumes, automation
may prove costly. Customised, hand crafted furniture and machine made standardised furniture
will require different processes. The degree of automation will vary with the degree of
standardisation of the product and the volume in which it is to be produced.
2. Vertical integration-Vertical integration is the degree to which an organisation will produce the
inputs and control the outputs of its production processes.
• Control over suppliers (inputs) is called backward vertical integration whereas control over
distribution channels (outputs) is called forward integration as shown in following figure.
Make-or-buy decisions depend on various factors.
• The organisation may prefer to outsource if the cost of procuring them is less than the cost of
manufacturing them. The organisation has to outsource when it lacks the know-how, skills and
technology to produce an item. Sometimes the organisation has to produce its own inputs even
though the costs are higher if the outsourced products are of low quality & reliability, Process
design will vary according to the degree of vertical integration that the organisation enjoys.
 CONT....
3. Flexibility-This can be one of the competitive priorities for an organisation.
Flexibility is necessary both in terms of product variety and product volume, It is the
ability of the production processes to adjust according to changes in demand,
technology, resource availability and product variety and volume. The choice of
production processes depends on the degree of flexibility desired by the organisation.

4. Quality level and degree of customer contact-Another factor influencing process

design is the quality level desired and the amount of customer contact that is provided
If products are highly customised, there will be a high degree of customer contact and
the processes will have to be flexible so that they can respond to the customer's
requirements.