Chapter 2.

Product Design
Contents...
2.1 Introduction to Product
2.1.1 Product Features/Layers in ProdUct
2.1.2 Product Classifications
2.2 Product Design
2.2.1 Meaning and Definition
2.2.2 Importance of Product Design
2.2.3 Factors Affecting Product Design
23 Basic Tools for Product Designing
2.3.1 Value Analysis and Value Engineering
2.3.2 Standardisation
2.3.3 Simplification
2.4 Product Policy
2.4.1 Meaning of Product Policy
2.4.2 Objectives of Product Policy
2.4.3 Elements of Product Policy
2.5 Product Development
2.5.1 Meaning of Product Development
2.5.2 Scope of Product Development
2.5.3 Importance of Product Development
2.5.4 Factors Responsible for Product Development
2.5.5 Stages in Developing a New Product
2.5.6 Techniques of Product Development
Points to Remember
Questions for DiscUssion

Learning Objectives...
To study the definition, importance and the factors affecting product Design
To understand the objectives and elements of Product Policy
To learn the meaning, importance and factors responsible for Product Development
To be able to explain the stages in developing a new product
To study the techniques of Product Development
To understand the concept of Standardisation, Simplification, Value analysis and Value
Engineering
(2.1)
Production &Operalion Manogemont
2.2 Product Design
2.1 INTRODUCTION TO PRODUCT
Aproduct is a bundle of utilities. Anew product is introduced by research, by obtaining
patents or through ajoint venture. In all these cases, one needs to undertake the process of
product planning and designing. The success or failure of an organisation depends primarily
on selection of the right product. Market research may sometimes help in choosing a
product. However, such a product may be repetitive.
However, it iS usually possiblo ..
Atruly new product can rarely be built on past history.
often substitutes th
forecast new model sales using past information since the new model
entirely new prode
old (as with "new" cars). An ambitious business will try to introduce an
which comes through in-house research and innovations.
which ca
Innovation is a process of converting an invention(s) into some useful product
satisfy human wants either directly or indirectly. A product which has been innovated in the
past by an organisation will definitely reach its maturity stage at some point of time. The rato
at which it reaches the maturity stage depends on technology, level of competition, rate of
obsolescence, culture, taste of customers, etc. So, an organisation must continuously monitor
the market and its environment for possible upgradation of its product, at least to retain ite
market share at the present level.
The product may be upgraded either by changing some parts to improve its operational
performance or by completely changing the technology employed in the manufacturing
process Sometimes, a change in the product must be introduced to reduce its price so that
the price becomes competitive in the market. Organisations require flexibility to enable them
to introduce new products rapidly and to change their product mixes often.
24.1 Product Features/Layers in Product
A product has got different layers like an onion and each of the layers contribute to the
total product image/design.
Accordingto Kotiera product has five layers which must be distinguished:
Potential product

AUgmentedproducg
oectedproducr
gasic,
produc

Core
product
 Productlon &Operallon Management 2.3 Product Design

TheseCore product-e
layers are: acrotort
3edi h
offosc, toer
Basic product--ye ESm
Expectedproduct o
Augmented product -A udwd
Potential product - Fare bas LGgs le
Essential Features of Products and Services which are to be taken into account while
designing aproduct are:
Customer satisfaction
Business needs satisfaction
Value for money
Associated attributes
Tangible attributes
Intangible attributes
2.1,2 Product Classifications
Marketershave traditionally classified products on the basis of three characteristics,
durability. tangibility and use.
The following chart shows product classification:
Product Classification

1) Durability and Tangibility 2) Consumer goods 3) Industrial goods

a) Non-durable goods a) Convenience goods a) Material and parts
b) Durable goods b) Shopping goods b) Capital Items
c) Services ) Special goods c) Supplies and
business services
1) Examples of Durability and Tangibility
(a) Non-durable Goods: Non-durable goods are tangible goods which are
immediately
used by aconsumer or which have an expected lifespan of three years or less. Examples of
non-durable goods include food and clothing.
(b) Durable Goods: Durable goods are tangible goods or products that
aren't
consumed or quickly disposed off, and can be used for several years. For example, colour TV,
refrigerators, washing machines and vacuum cleaners.
(c) Services: Services are intangible, inseparable, variable and perishable. For example,
airline and banking services.
 2.4 Product Design
Production &Operation Management

Goods
2) Types of Consumer usually purchases
(a) Convenience Goods: These are goods that the customer include soaps and
Examples
frequently, immediately and with a minimum of effort.
into three categories:
newspapers. Convenience goods can be further classified
basis.
() Staple goods: Consumer purchases on regular
planning or search effort.
(ii) Impulse goods: Consumer purchases without any
urgent need.
(iii) Emergency goods: Consumer purchases on
process of selection
(b) Shopping Goods: These are goods that the customer, in the
suitability and quality. For
and purchase characteristically compares on such bases as
example, Furniture, Electrical Appliances, etc.
brand identification
(c) Special Goods: These are goods with unique characteristics or
effort. For
for which a sufficient number of buyers are willing to make a special purchasing
example, cars.
or does not
(d) Unsought Goods: These are goods the consumer does not know about
life
normally think of buying. The classic examples of known but unsought goods are
insurance.

3) Types of Industrial Goods

a) Materials and Parts: These are goods that enter the manufacturing process and are
materials
also known as inputs. They fall into two classes, raw materials and manufactured
and parts.
b) Capital Items: These are long-lasting goods that facilitate developing or managing
the finished product. They include two groups, installations and equipment.
c) Supplies and Business Services: These are shortlisting goods and services that
facilitate developing or managing the finished product.
2.2 PRODUCT DESIGN
2.2.1 Meaning and Definition
The design of the goods and services that an organisation offers in the market is
strategic in nature. Apart from directly affecting the organisation's success in the market
place, the effects of design are interrelated and they may affect many functions of the
organisation. Design is guided by objectives and policies that are best addressed when an
organisation considers the type of goods and services intends to offer and the level of
quality it intends to provide. Furthermore, a product's design and reputation affects the
image of the organisation as viewed by its ernployees, customers and the public. Design
affects many aspects of operations in addition to pricing,sales, revenuesand costs.
Product design can be defined as the idea generation, concept development, testing and
manufacturing or implementation of a physical object or service. Product Designers
conceptualise and evaluate ideas, making them tangible through products in a more
systematic approach.
 Production &Operallon Marnagement 2.5 Product Design

Design means determination of a shape, standard and pattern of the product.

Indian Patents and Design Act explains that, "Design means the feature of shape,
confiquration, pattern, or ornament, applied to any article by any industrial process whether
monual, mechanical or chemical, which in the finished article appeal to and are judged solely
hy the eye, but does not include any mode or principle of construction or anything which is a
mere mechanical device and does not include any trade mark."
Product Design includes specifications, experimental and developmental work,
calculation of estimates and instruction to the production department.
According to C. S. Deverell, Design in the broadest sense, includes the whole
development of the product through allthe primary stages until actual manufacturing begins. "
Product design is thus an essential without which production activities willnot be carried
out smoothly.
2.2.2 Importance of Product Design
Product design is cross-functional, knowledge-intensive work that has become
inereasingly important in today's fast-paced, globally competitive environment. It is a key
strategic activity in many firms because new products contribute significantly to sales
revenue. When firms are able to develop distinctive products, they have opportunities to
command premium pricing.
Product design is a critical factor in organisational success because it sets the
characteristics, features, and performance of the service or goods that the consumers
demand. The objective of product design is to create a good or service with excellent
functional utility and sales appeal at an acceptable cost and within a reasonable time. The
product should be produced using high-quality, low-cost materials and methods. It should
be produced on equipment that is or will be available when production begins. The resulting
product should be competitive with or better than similar products in the market in terms of
quality, appearance, performance, service life, and price
Product design is more important than ever because customers are demanding greater
product variety and are switching more quickly to products with state-of-the-art technology.
The impacts of greater product variety and shorter product life cycles have a multiplicative
effect on the number of new products and derivative products that need to be designed.
Y For example, just a few years ago, a firm may have produced four different products and
each product may have had a product life cycle of ten years. In this case, the firm must
design four new products every ten years. Today, in order to be competitive, this firm may
produce eight different products with a life cycle of only five years; this firm must introduce
eight new products in five yeàrs. That represents sixteen new products in ten years or one
product every seven and one-half months. In this fast-paced environment, product design
ceases to be an ad hoc, intermittent activity and becomes a reqular and routine action. For an
organisation, delays, problems, and confusion in product design shift from being an
annoyance to being life threatening.
Produclon &Operation Management 2.6 Product Deslgn

2.2.3 Factors Affecting Product Design

There are many factors which significantly influence the design of a product. The factors
are:

(1) Customer's Requirements and Psychological Effects: The technical department must
should create a g0od
find out the basic needs and psychology of the customers. It
durability and
image on the customer and increase his confidence regarding quality,
performance of the product.
with all the
(2) Facility to Operator: The designer must see that the operator is provided
comforts and facilities in handling the operations. A complicated design may involve
certain operations which the operator may not be able to perform efficiently or the
operator is tired and as a result is able to produce less.
(3) Functionality: The design should be such that the product is functionally sound.
It must be able to perform the functions for which it is made. There must be proper
co-ordination between its appearance and service to the customer.
(4) Materials: The nature and quality of the materials have profound influence over the
product. The designer should have all relevant information about new materials
available to make the desired product. Industrial, scientific and technical journals
provide necessary information in this regard.
(5) Work Methods and Equipment: Work methods and equipment to be used in the
manufacture of the proposed product are of great importance to the utility and viability
of the design. The designer must be aware of development for improving the work
methods and nature of the equipment.
Possibility of modifications in the work methods can influence the production costs.
2.3 BASIC TOOLS FOR PRODUCT DESIGNING
Manufactured products or services must have market appeal and be reasonably easy to
produce with quality and economy. It has been estimated that 70 percent or more of a
manufactured product's cost is determined by its design. This is because the design
establishes the number of parts that must be made or purchased, the type of material and
equipment that will be used, and the amount of labour that will be needed. So, designers
must be careful about the consequences of the different design parameters while designing
a product.
A general guideline often followed by designers of manufactured items is to reduce the
number of parts a company should make. This is possible through value analysis,
standardisation and simplification. Standardisation aims at having fewer choices of the
components and products that will be produced, so that there is more focus on the
production operations. The use of common components in multiple models of a product is
an example of standardisation. Simplification aims to have no more parts than are necessary
toperform the product's intended function and tries to reduce the complexity of those parts.
 Productlon &Operatlon Management 2.7 Product Design

2.3.1 Value Analysis and Value Engineering

Concept of Value
The term 'value' is used in many different ways and consequently, has many different
meanings. The designer equates the value with reliability; the purchase person equates it
with price paid for the item; the production person with what it costs to manufacture and
sales personnel with what the customer is willing to pay.
Value, in any value investigation, refers to economic value, which itself can be divided
into four types: cost value, exchange value, use value and esteem value.
(1) Cost Value: It is the summation of the labour, material, overheads and all other
elements of cost required to produce an item or provide a service.
(2) Exchange Value: It is the measure of all the properties, qualities and features of the
product which make it possible for the product to be traded for another product or
for money. In a conventional sense, exchange value refers to the price that
purchaser will offer for the product, the price being dependent upon satisfaction
(value) which he derives from the product. Value derived from the product consists of
two parts:value due to reliable performance of the product and the value which the
possession bestows upon the buyer. These are often referred to as use value and
esteem value.
(3) Use Value: It is also known as the function value. The use value is equal to the value
of the functions performed. Therefore, it is the price paid by the buyer (buyer's view)
or the cost incurred by the manufacturer (manufacturer's view) in order to ensure
that the product performs its intended functions efficiently. The use value is the
fundamental form of economic value. An item without use value can have neither
exchange value nor esteem value.
(4) Esteem Value: It involves the qualities and appearance of a product (like a TV set)
which attract persons and creates in them a desire to possess the product. Therefore,
esteem value is the price paid by the buyer or the cost incurred by the manufacturer
beyond the use value.
A}Meaning of Value Analysis and Value Engineering
Value Analysis is one of the major techniques of cost reduction and cost prevention. It is
a disciplined approach that ensures the necessary functions at minimum cost without
compromising on quality, reliability, performance and appearance.
According to the Society of American Value Engineers (SAVE), "Value Analysis is the
systematic application of recognised techniques which identify the function of a product or
service, establish a monetary value for the function and provide the necessary function reliably
at the lowest overall cost". It is an organised approach to identify
unnecessary costs
associated with any product, material part, component, system or service by analysis of
function and efficiently eliminating them without impairing the quality, functional reliability
or its capacity to provide service.
 2.8 Product Design
Production &Operation Management

the two terms are used synonymously and philosophy underlying is the same
Though
eliminaiton, there is a difference between the two. The difference lies in
ie. unnecessary cost
the technique is applied.
time and the phase of product life cycle at which
a view to improve its value. It is
Value Analysis is applied to the existing product with
procedure.
analysis after the fact and it is a remedial
design stage and thus ensures
Value Engineering is applied to the product at the
elimination.
prevention rather than

BY History of Value Analysis/Value Engineering Engineering was the "Asbestos Affair"

The event that triggered the development of Value time was soon after the Second
which ocurred in the GEC of the U.S., in the year 1947. The
material for godowns was not
Word War and asbestos which was required as a flooring
specialised dealers, was discovered that a
easily available. When the company consulted than asbestos, was
Substitute that possessed the required properties and was cheaper
However, because the fire control
availabie even before asbestos came into the market.
of only asbestos in the
requlations were in force in the country, which prescribed the use
study of the
flooring, the substitute material could not be used. This incident promoted the
project led by
functions of various products. The system which developed as a result of a and which
millions,
LD. Miles of the GEC after five years of work and an expenditure of $3
is
aimed at "finding the most effective method of improving the value of the product"
presently known as Value Analysis (VA).
The Indian Value Engineering Society (INVEST) Was formed in 1977. Nowadays VA is
applied in public and private sector industries in India.
() Need to Apply Value Analysis
One can definitely expect very good results by initiating the VA programme when one or
more of the following symptoms are observed:
Products show decline in sales.
Manufacturing costs are higher than those of its competitors.
Raw materials' cost has gone up suddenly.
New designs are being introduced.
The cost of manufacturing is rising disproportionate to the volume of production.
Rate of return on investment has a falling trend.
The firm is unable to meet its delivery commitment.
{D] Performance
The performance of a product is the measure of its functional features and properties
that make it suitable for a specific purpose. Appropriate performance should fulfill the
following criteria:
The product reliably accomplishes the intended use of work or service requirement
(functional requirements).
 Production & Operatlon Management 2.9 Product Design

The product provides protection against accident, harmful effects on body and
danger to human life (safety requirements).
The product gives trouble free service cover during its specified life span (reliability
requirements).
Service and maintenance work can be carried out on the product with ease and by
the use of simple tools (maintainability requirements).
Appearance of the product creates an impression on the buyer and induces in him or
her, the desire to own the product (appearance requirements).
Mere performance in its absolute form is not enough. Performance and cost must be
interwoven. Desired performance at the least cost must be achieved by selecting
appropriate materials and manufacturing operations. Therefore, the value of the
product is the ratio of performance (utility) to cost.
Value =
Performance (Utility)
Cost

Value can be increased either by increasing the utility for the same cost or by decreasing
the cost for the same utility. Satisfactory performance at lesser cost through identification
and development of low cost alternatives is the philosophy of VA.
(EJ Aims and Objectives of Value Analysis
The aims of Value Engineering are listed below:
1. Simplifying the product.
2. Using (new) cheaper and better materials.
3. Modifying and improving product design.
4. Using efficient processes.
5. Reducing the product cost.
6. Increasing the utility of the product by economical means.
7. Saving money or increasing the profits.
The value content of each piece of a product is assessed using the following questions:
Does its use contribute to value?
Is its cost proportionate to its usefulness?
Does it need all its features?
These three questions relate to the function of the part which may decide the elimination
of parts.
Is there anything better for the intended use?
Can company or vendor standard be used?
Can ausable part be made by a lower-cost method?
Is it made with the proper tooling, considering volume?
Does the part yield suitable profit?
Can another vendor furnish the same at a lower cost?
 2.10 Product Design
Production &Operation Management

(F] Value Engineering Procedure

The basic steps of value engineering are listed below:
1. Plan i) Identify the product
i) Collect relevant information
iii) Define different functions
2. Create iv) Different alternatives
v) Critically evaluate the alternatives
3. Refine vi) Develop the best alternative
vii) Implement the alternative
Step 1: Identify the product
should add value
First, identify the component for study. In future, any design change
as
and not make the product an obsolete one. Value Engineering can be applied to a product
a whole or to its subunits.
Step 2: Collect relevant information
Information relevant to the following must be collected:
Technical specifications with drawings.
Production processes, machine layout and instruction sheet.
Time study details and manufacturing capacity.
Complete cost data and marketing details.
Latest development in related products.
Step 3: Define different functions
Identify and define the primary, secondary and tertiary functions of the product or parts
of interest. Also, specify the value content of each function and identify the high cost areas.
Step 4: Different alternatives
Knowing the functions of each component part and its manufacturing details, generate
the ideas and create different alternatives so as to increase the value of the product. Value
Engineering should be done with brain storming sessions. All feasible and non-feasible
suggestions are recorded without any criticism; rather, persons are encouraged to express
their views freely.
Basic priniples of brainstorming: Some of the important principles of brain storming
which are useful in Value Analysis are listed below:
(a) A quality idea comes from quantity of ideas. If the number of ideas generated is
more, more is the probability of good solutions turning up.
(b) Creative ideas emerge from unconventional thinking. This is possible when members
of the group "talk off the top of their heads" and voice wild ideas which flash through their
minds, regardless of how stupid or impractical the ideas may appear. Real creative ideas
result when members venture into impossible areas. Often, non-technical personnel can
 Production &Operation Management 2.11 Product Design

prove to be the greatest innovators in technical areas since, their viewpoints are objective
and they do not know that some of their ideas are technically impossible. So it is preferable
to include one or two non-technical persons in the study team. Members are to be told by
the team leader in the beginning of the session itself, not to breathe a word of criticism of
even the most crackpot idea.
(c) Spontaneous evaluation of ideas curbs imaginative thinking and retards the flow of
creative ideas. The group should not immediately evaluate the alternatives suggested by its
members since, immediate evaluation may curb imaginative thinking and also slow down the
flow of creative ideas.
(d) Hitch-hiking on the ideas often leads to better ideas. Participants need to improve
upon ideas of other members, either directly or by combining more ideas in addition to
contributing ideas of their own. Abrilliant idea may not seem to be practical initially, or it
may appear to be silly or useless, but discussions can convert it into a valuable one.
(e) Creativity is a regenerative process and the recording of ideas as they emerge, helps
to serve as catalyst to generate more ideas. Memory may not retain all ideas or recall them
when they are needed. So, a stenographer may be asked to record ideas simultaneously. A
tape recorder can also be used for this purpose or even ideas can be written on a black
board. These recorded ideas can be reviewed at some later date.
( When ideas cease to flow, short diversions enable the mind to rebound with new
ideas after recuperation. Members of the syndicate may reach a stage where new ideas do
not come. At such stage, short diversions-rest, favourite sport, hobby, lunch or tea break, etc.,.
may be taken during which members are advised to sleep over the ideas and report fresh
after the break. Such short diversions enable the mind to recoup and rebound with new
ideas.

Step 5: Critically evaluate the alternatives

Different ideas recorded under Step 4 are compared, evaluated and critically assessed for
their virtues, validity and feasibility as regards their financial and technical requirements. The
ideas technically sound and involving lower costs are further developed.
Step 6: Develop the best alternative
Detailed development plans are made for those ideas which emerged during Step 5, and
appear most suitable and promising. Development plans comprise drawing the sketches,
building of models, conducting discussions with the purchase section, finance section,
marketing division etc.
Step 7: Implement the alternative
The best alternative is converted into a prototype manufacturing model which ultimately
goes into operation and its results are recorded.
[G] Advantages of Value engineering
The advantages of Value Engineering are listed below:
Value Engineering is a much faster cost reduction technique.
Production &Operstion Management 212 Product Design

It isa less expensive technique.

Value Engineeing reduces production costs and adds value to sales income of the
product
2.3.2 Standardisation
(In reality, numerous vaneties of components are used in vanious equipment. Same
product will be sold by different companies (ike thvo wheelers, washing machines, cycles
mixies, refigerators electnic motors, etc). If we closely examine the components used in each
of the above products supplied by different vendors, we find exact similarity in terms of
shape and size among the components like bearings, nuts, bolts, springs, screws, axle, etc.
Bearings tyres etc which are manufactured by third parties can be used in any two
brands of products manufactured by two different companies. Under this situation, one
should establish a common standard so that the parts/components can be interchangeably
used in both products.
Standardisation is the base of all mass production systems. When one purchases a new
V-Belt for a scooter, he knows that it will fit into the V-groove. This is mainly because V-belts
are standardised. Standards convey the sense that only certain specific sizes are made and
sold.
One can provide numerous components/parts in numerous sizes/shapes, but maintaining
a oroper stock of all the items will be a problem for the retailers. Moreover, it is not possible
to take advantage of mass production, because some parts need to be manufactured in small
batches. So. standardisation solves all these problems because standardisation is the process
of establishing standards or units of measure by which quality, quantity, value, performance,
ett may be compared and measured.
IAJ Standardisation Procedure
The steps involved in standardisation are as follows :
1. With the help of market research, sales statistics, etc. determine what is to be sold in
future.
2. Define a range of products.
3. From the range of products, select the minimum variety of components matching the
range for manufacturing. Introduce new materials, components, etc., if necessary.
Standardisation necessitates the classification of materials and component parts.
B] Classification
Classification will be of great value in material and component standardisation.
Classification aims at systematically grouping together items, based on their common
features and subdividing them by their special features. A system of classification and
codification is necessary for the design of new products within the defined range. Such
systems should readily,
Identify and locate identical items.
Facilitate the use of standard items in new designs.
 Product Design
Production &Operation Management 213

Identify substitutes in case of stockouts.

Help to develop group technology which will be of more use in designing layout and
facilities.
Aid in improving parts location in the store.
JGAdvantages of Standardisation
The advantages gained from the standardisation procedure are as listed below.
Fewer specifications, drawings and part lists have to be prepared and issued.
Better quality products.
Lower unit costs.
Increased margin of profit.
Easy availability of spares.
Minimum inventory cost.
Quantity discounts are possible because of purchase of raw materials in large
volume.
23.3 Simplification
Simplification means elimination of superfluous varieties, sizes, dimensions. etc. Product
simplification means reducing the number of varieties. The other names for simplification are
unification or variety reduction.
Simplification will be advantageous to manufacturers, suppliers and buyers. Reduced
inventory, better plant utilisation, greater use of storage space, reduction of buying/selling
efforts are the advantages of simplification to manufacturers. Suppliers can concentrate on
the sale of fewer items and thereby increase their turnover. Buyers can have better after sales
services due to the use of less number of parts. Simplification is the first step towards
standardisation

AAJConsiderations in simplifying items

1. Can simplification be effectively achieved depending upon the nature of the item?
2. How will simplification affect customer demand and volume of sale?
3. Does market competition permit simplification or does it encourage product
diversification?

B)-Computer Aided Design (CAD)

Currently. business managers and engineers perceive computer-aided design (CAD) as a
tool to assist engineers in designing goods. CAD uses computer technology and a graphic
display to represent physical shapes in the same way that engineering drawings have in the
past. It is used in the metalworking industry to display component parts, to illustrate size and
shape, to show possible relationships to other parts, and to indicate component deformation
under specified loads. After the design has been completed, the engineer can examine many
different views or sections of the part and finally send it to a plotter to prepare drawings. This
capability greatly reduces engineering time and avoids routine mistakes made in analysis and
Production &Operation Management 2.14 Product Design

drawing. It significantly increases productivity and reduces design time, which allows faster
delivery.
Applications of CAD systems are not limited to producing goods. While it's true that
services do not have physical dimensions, the equipment and facilities used to produce
services do. For example, the service stalls in an automotive center or rooms in an emergeno
medical center have physical characteristics that can be represented by the interactive
graphics capabilities of a CAD system.
Computer-aided design (CAD), also known as computer-aided design and drafting
(CADD), involves the entire spectrum of drawing with the aid of a computer-from straight
lines to custom animation. In practice,CAD refers to software for the design of engineering
and architectural solutions, complete with two- and three-dimensional modelling capablities.
Computer-aided manufacturing (CAM) involves the use of computers to aid in any
manufacturing process, including flexible manufacturing and robotics. Often outputs from
CAD Systems serve as inputs to CAM systems. When these two systems work in conjunction,
the result is called CAD/CAM, and becomes part of a firm's computer-integrated
manufacturing (CIM) process.
CAD/CAM systems are intended to assist in many, if not all, of the steps of a typical
product life cycle. The product life cycle involves a design phase and an implementation
phase. The design phase includes identifying the design needs and specifications; performing
a feasibility study, design documentation, evaluation, analysis, and optimisation; and
completing the design itself. The implementation phase includes process planning,
production planning, quality control, packaging, marketing, and shipping.
CAD systems can help with most of the design phase processes, while CAM systems can
help with most of the implementation processes.
The objectives of CAD are as follows:
To increase the productivity of the designer. This is accomplished by helping the
designer to visualise the product and its component sub-assemblies and parts, and
by reducing the time required in synthesising, analysing, and documenting the
design.
To create a database for manufacturing. In this process of creating the documentation
for the product design (Geometric specification and dimensions of the product and
its components, material specifications for components, bill of materials, etc.) much
of the required database to manufacture the product is also created.
The components of CAD system are the designer, hardware (the computer and its
peripheral equipment) and software (the general system software and the CAD software). The
benefits of using CAD system are as follows:
(a) Improved visualisation of the item being designed.
(b) Ability to examine alternative designs in a relatively short period of time compared to
the drawing board approach.
 Product Design
Productlon & Operation Management 2.15

(c) Ease in designing the mating parts that are to be assembled together in the product.
Capability tosimulate the operation of the item being designed.
(d) Ability to solve computationaldesign problems.
[C] Computer Aided Manufacturing (CAM)
It is defined to be the effective utilisation of computer technology in the management,
control and operations of the manufacturing facility through either direct or indirect
computer interface with the physical and human resources of the company.
Application of CAM System: CAM has the following direct and indirect applications.
In direct applications, the computer is used either to monitor or to control the
manufacturing operations.
In indirect applications, the computer is used in support of the manufacturing activities in
the plant, but there is no direct connection between the computer and the production
process
HD] CAD/CAM/CAE
The application of computers in design and manufacturing constitutes the most
significant opportunity for substantil productivity gains in industry today. It is expected that
this trend towards computerisation will ultimately lead to the 'computer integrated automatic
factory' very soon.
Companies implementing concurrent engineering should possess CAD/CAM systems. It is
advisable to have at least a CAD system in the organisation to speed up the design and
redesigning procedures. With right application of hardware and software, it is possible to
develop the final design with fewer prototypes which, in turn, will reduce the lead time of
product development.
CAD/CAM refers to the integration of computers into the entire design to production
cycle of a product.
Computer Aided Engineering (CAE) is the analysis of a design for error checking, or
optimising manufacturability, performance and economy. Information drawn from the
CAD/CAM database is used to analyse the functional characteristics of a product, part or
system and design and to simulate its various performance.
Concurrent engineering provides common database for newW products or existing
products to all departments in the form they require and processing of these data as
required.
The type of data that is available in the database are as follows:
design data for product and component supplier
functional design specifications for specialist suppliers
manufacturing data for manufacturing engineers
specification for cost analysis for accountants
specification in product features for marketing
Production &Operation Management 2.16 Product Design
Poduc Voces the
2.4 PRODUCT POLICYmarkei actiec of he im
maee ighk
2.4.1 Meaning of Product Policy4 heps
Policy can be defined as the broad guidelines relating to a particular matter. Policies ar
framed at the top level of management, e.g. Board of Directors. Thus, Product policies are
broad guidelines formulated by the top management of the company with regard toproduct
planning and development. Therefore, product policy can be termed as long-term planning
and management of its product-mix by a marketing company in order to achieve maximum
Consumer satisfaction.

2.4.2 Objectives of Product Policy

1. Survival: The prime objective of a marketing company is to keep itself in the market.
An effective product policy aims to follow strategies to keep the products in the
market.
2. Growth: After securing the survival objectives, the next objective of product policy
would be growth. Product policy is formulated in such a manner so that it provides
development of marketing operations according to long-ternm planníng of the
company.
3. Flexibility: Though product policy is designed for a longer period, it becomes
necessary to evaluate the effect of emerging trends in marketing. One of the
objectives of product policy is to keep flexibility so that it could be changed
according to new consumer aspirations and needs, government rules and
regulations.
4. Maximum Resource Utilisation: One objective of the product policy is maximum
use of various resources of the company. Product Policy is designed and altered in
such a manner that the company can adequately utilise its various resources, e.g.
utilisation of surplus funds, full production up to installed capacity, use of idle
resources, maximum exposure to managerial talent and sale torce of the company.
2.4.3 Elements of Product Policy
Product policy generally covers the following:
1. Product Planning and Development: Product planning embraces all activities
enable producers and middlemen to determine what should constitute a
which
of products. Product development embraces the technical activities of
company's line
product research,
engineering and design.
2. Product Mix: Product mix, also known as product
assortment, refers to the total number
of product lines that a company offers to its customers. For
example, a small
may sell multiple lines of products. Sometimes, these product lines are fairly company
as dish washing liquid and bar soap, which are used for cleaning and use
similar, such
similar
technologies. Other times, the product lines are vastly different, such as diapers and
razors. The four dimensions to a company's product mix include width, length, depth and
consistency.
Production &Operation Management 2.17 Product Design

3. Product Packaging: The purpose of product packaging is to protect the product from
damage. Product packaging not only protects the product during transit from the
manufacturer to the retailer, but it also prevents damage while the product sits on retail
shelves. Most products have some form of packaging. For example, soups must have a
container and package while apples may have packaging for transport but not to sell the
product from the produce department of the local grocery store.
4. Product Positioning: Product positioning is an important element of a marketing plan.
Product positioning is the process marketers use to determine how to best communicate
their products' attributes to their target customers based on customer needs, competitive
pressures, available communication channels and carefully crafted key messages.
Effective product positioning ensures that marketing messages resonate with target
consumers and compel them to take action.
5. Product Branding: Branding is the process involved in creating a unique name and
image for a product in the consumers' mind, mainly through advertising campaigns with
aconsistent theme. Branding aims to establish a significant and differentiated presence
in the market that attracts and retains loyal customers.

2.5 PRODUCT DEVELOPMENT e

2.5.1 Meaning of Product Development
Product development is the process of designing, creating, and marketing an idea or
product. The product can either be one that is new to the marketplace or one that is new to a
particular company, or, an existing product that has been improved. In many instances, a
product willbe labelled new and improved when substantial changes have been made.
Allproduct development goes through a similar planning process. Although the process
is a continuous one, it is crucial that companies stand back after each step and evaluate
whether the new product is worth the investment to continue. That evaluation should be
based on a specific set of objective criteria, not someone's intuition or gut feeling. Even if the
product is wonderful, if no one buys it, the company will not make a profit.
Brainstorming and developing aconcept is the first step in product development. Once
an idea is generated, it is important to determine whether there is a market for the product,
what the target market is, and whether the idea will be profitable, as well as whether it is
feasible from an engineering and financial standpoint.
Once the product is determined to be feasible, the idea or concept is tested on a small
sample of customers within the target market to see what their reactions are. It means
conformation of the product according to the demand of the public. It is a special activity
which may result in creation of new products or changes in the production process to
produce the same product. The main purpose of product development is to provide goods
as per market demands in time and charge reasonable rates under the conditions that it may
provide a new product also. In other words, development is essential to fulfill old and new
requirements as well as to adjust with the changes in the consumer's demand with an aim to
achieve greater efficiency and profits.
Production &Operation Management 2.18
Product Dosig
2.5.2 Scope of Product Development
Product development is the first and most significant step in the product
process. It is a continuous activity. planni
It involves: (1) Product Innovation, (2) Product Improvement, (3) Packing Improvement
ng
(1) Product Innovation: Product innovation is the development of a
new produc
resulting into an increase in the product line. The changes in the
marke
technological changes in customer needs and styles etc, are taken into consideratio
(2) Product Improvement: Product improvement involves improvement in quality,. cio.
form, design and packing of an existing product.
(3) Packing Improvement: This is also an important form of product development Th
attractive packing helps to increase the sale of the product.
2.5.3 Importance of Product Development
The advantages of product development are as mentioned below:
(1) Industrial Stability: Afirm following the policy of product development is likely to
be more stable because will not have to face obsolescence or closure of the unit because it
always remains in touch with changes in technology, new products and new markets.
(2) Diversification of Risk: Product development helps to diversify the product as wel
as risk. The greater than variety of products produced by a firm, the smaller the relative
impact of one's disappearance from the market.
(3) Availability of New Products: Product development helps to bring new products in
the market. The most successful products of one time become obsolete the other day.
Hence, the marketers consciously strive to reach specific market segments by introducing
new products.
(4) Proper Utilisation of Waste of Scrap: Product development helps the company to
make proper use of waste of scrap from present production.
(5) Efficient Use of Marketing and Production Skills: Product development helps the
companies to make more efficient use of marketing and production skills.
2.5.4 Factors Responsible for Product Development
A well organised and properly coordinated plan of product development stabilises the
developmental advantages to the consumers, producers and whole of the society. Thus, it
will improve the general standard of living of the people of the country as a
whole. The
effectiveness of product development strategy can be ascertained by getting the answers to
aseries of questions. The question or factors are:
(1) Are the customers satisfied with the colour, size, shape and
customer's preferences?
(2) Possibility and scope for product protection.
(3) Can the organisation ensure stable supply of the product?
 Product Design
Productlon &Operatlon Monagement 2.19

(4) Durability of the product and chances of its spoilage during the course of its transter
to the customers.
(5) Buying capacity of the cUstomer and the price of the product.
(6) Is the product convenient to handle during transportation or to use?
(7) Is the quality of the product likely to increase continuously due to the improvement
in quality?
(8 Can the product be sold or distributed through the existing distribution channels?
(9) What relationship will stand between expenditure on product development efforts
both in planning and implementation and the return expected from the new
strategy?
(10) Is the product convenient to stock and display?
(11) Capability of the product to make the purchasing easy and satisfactory.
(12) Effect of product development programme on their products in line.
(13) Can the organisation achíeve economy in production costs, so that the price of the
product may be afforded by the consumer?
The product development must be carried out effectively, if the answers to the above
questions are satisfactory.
2.5.5 Stages in Developing a New Product
This process starts with an analysis of the business and all its aspects, then leading to the
establishment of objectives and goals. Various ways to satísfy the objectives are generated,
screened, and finally submitted to a detailed business analysis during which strategies are
finalised. Finally product development begins, based on well-defined cost, timing, and
performance goals. The steps involved in new product development process are as follows:
1. New product strategy development, Jdea ge rerat ion
2. ldea generation,
3. Idea Screening and evaluation, Tdea scie coiy
4. Concept Development,
5. Testing,
Corrc elin; maiket
6. Commercialisation. Busine Arcsi
Procur Deelpn ert
(1) New product strategy developrment provides corporate strategic guidelines for the
new product development process through assessnent of internal experience and external
opportunities. The learning curves, organisation business strategies and goals are to be set
before venturing into a new product. The top management / entrepreneur will decide the
premises under which business goals are set.
(2) ldea generation is the first step in product designing. dea generation involves the
use of various idea sources and idea generation techníques required to identify new ways to
satisfy needs and monitor the evolving technologies. Creative activity is necessary to obtain
enough alternatives to ensure a high probability of success.
Production &Operation Management 2.20 Product Design

Four techniques for generating ideas are:

(a) Attribute listing
(b) Forced relationship
(c) Brainstorming
(d) Synectics
attention on the
(a) Attribute listing is useful for individuals because it focuses
problem(s) to be solved. The danger is that the wrong attributes may have been listed, as
make the major
was the case with all the industries identified above that did not
breakthroughs.
(b) Forced relationships occur when two different products are forced to become one.
and a
For example, a lamp and a birdcage make a unique pull-down lamp. However, a wall
table become a marketable new product, and one that is currently finding acceptance.
(c) Brainstorming is a group creativity effort that requires no criticism and rapid give
the
and take within a group. Alex Osborn in his book Applied Imagination describes some of
techniques of brainstorming as these: Make it larger, make it smaller turn it upside down.
divide it, multiply it, reverse it, keep the ideas flowing, and above all, don't criticise.
(d) Synectics is a technique that asks the group to withdraw from the specific problem
to a more general problem. As an example of synectics, consider the problem of closure.
What is there in nature that closes? One list might include an eyelid, amouth, a pore, a hand.
the iris of the eye, a honeycomb cell, a heart valve, etc. Once the problem is described using
terms closer to the problem at hand these may be developed into a possible solution. In this
case it was to develop a closure device for a thermos bottle. Aunique design was developed
using the principle of the iris. Unfortunately, when this was analysed for potential new
problems, the design had to be dropped because of foreseeable problems associated with a
knife cutting or a fork puncturing the closure.
(3) Idea Screening and Evaluation: The next step to idea generation is screening.
New product screening is the development and systematic use of criteria to evaluate the
potential of new product ideas. The list of ideas generated through the various above given
techniques are further screened for their feasibility. Many of these ideas are eliminated at
the following hurdles:
(a) Capital requirement
(b) Technology
(c) State Permission
(d) Society / Social Restrictions
Many of the ideas are dropped due to either non-availability of capital or technology.
Even if capital and technologies are available for few innovative products, Government
permission is not granted and hence eliminated. In some cases, although all these four
 Product Design
Production &Operation Management 2,21

aspects are favourable/ available, society may not permit or accept a product. For example,
in the state of Gujarat vegetarianism is not due to religion but culture. Thus, for a non
vegetarian product though capital, technology and government permission might be
available, the local society may not allow its sale.
(4) Concept Development: The ideas in the above two steps are picturised on paper.
This is the drawing board stage which helps in understanding how the product looks like,
what are the materials, machines, technology and expertise required to manufacture the
product etc. These are then listed down. Sometimes, it may be observed that the idea is
infeasible and hence dropped at this stage. The successful idea is passed to the next step of
business analysis.
Business analysis is an in-depth study of the estimated economic feasibility of new
product ideas. This is nothing but cost benefit analysis. In this step, the cost of
manufacturing, investment and revenues are estimated. The ROl is also calculated, if the cost
of manufacturing is higher than the market price, the idea is dropped. The quantum of
output is to be decided and related with the market price so as to generate adequate
revenues and satisfactory ROI. Those ideas which are passed go into the prototype model
development.
Product development involves developing the product (or service) itself (with attention
to attributes preferred by customers) and further development of manufacturing, packaging
and distribution cost stimates. Aprototype of mini-chair model of the product is developed
to know the exact manufacturing process, material requirements, machine requirements, skill
requirement etc. The prototype displays the expected performance of the product. If it is not
satisfactory, even at this stage, the product/idea may be dropped. The mini-chair/prototype
is made as equal to the original product as possible.
(5) Testing stage/Market Feedback thoroughly evaluates potential market acceptance
through the use of market research. Those ideas whose prototype model is successful are
manufactured in small numbers as real products. These newly developed un-branded
products are provided to loyal selected dealers and company employees. Their detailed
response is collected with respect to performance and quality of the product. Once their
suggestions are collected the product is modified to suit the customer's needs. The product
then goes into the final stage of commercial production.
(6) Commercialisation is the actual introduction of the product into the market, with all
the related decisions and resource commitments. This is the last but very important step; it
involves not only investment of capital but the organisations image. Once, the product is
manufactured on a commercial basis, its withdrawal is very difficult. If the product fails, the
investment along with organisation image and market value are all harmed. Before starting
the commercial production of a product all the previous six steps in product designing
should be thoroughly and effectively carried out.
Production &Operation Menagement 2.22 Product Design
2.5.6 Techniques of Product Development
(1) Product Differentiation: The technique used by firms to render their product/brad
distinct and different from the competing brands, is termed as 'product differentiation. There
are two broad strategy routes open to any firm to meet competition in the market place, the
price route and the differentiation route. The differentiation can be based on product
channel and promotion. 'Product', however, offers the maximum scope for differentiation
Those who take to 'Product' differentiation show their product/brand with uniqueness and
distinction in ever possible [Link] also make Product' their prominent strategic weapon,
(2) Product Positioning: Product positioning is a process of identifying the needs of
market segments product strength and weaknesses and the extent to which competing
products are perceived to meet the consumer needs Product positioning is an attempt to
define or revse the product image in the market than one that has been prevailing. Product
positioning is the delicate task of relating a product to the market or a market segment.
Product Positioning is a method, that emphasises the product that proves attractive to the
consumers eg a two wheeler manufacturer might engineer the product to be safer, more
accommodative, more fuel efficient than those of competitors.
It also includes activities like determining the market segment towards which major
market effort will be directed on behalf of a product and suggesting methods to differentiate
the products from competing ones. Each marketer wants to create a specific position for its
product among any competitive products and advertising is effectively employed to achieve
this end. To be successtul, an advertiser must create a position in the prospects mind. This
"position' involves not only the strength or the benefit to be derived from the product, but
also the manner in which it differs from the products of other competitors.
(3) Product Simplification: Refer to Point 2.6.3 of this Chapter.
(4) Product Elimination: The removal of products from the PRODUCT PORTFOLIO once
they have reached the decline stage of the life cycle is called 'Product Elimination. Usually,
the choice rests, between immediate withdrawal and phasing it out slowly. The latter
approach is often referred to as milling, harvesting, run-out, or product petrification.
Elimination of a product means withdrawal of product or cancelation of a product
R.S. Alexander opined, "Putting products to death or letting them die is a drab business and
often engenders much of the sadness of a final parting with an old and trusted friend.:
Inspite of this hesitation most managements are always on the look-out for finding weak
productS and adopt a gradual elimination of such products.
There are some products which cannot be improved or modified to suit the market/Here
the profitable alternative would be to withdraw the product. The process of withdrawal is
technically known as 'Product Elimination'. Products are removed from the product line at
times. Though management introduces a new product and reviews existing products from
time to time and at times cancels the production, continuation of sick products will lead
company to lack of profita bility. Again, these products require adisproportionate amount o
management's time and may even spoil the company's reputation if they are unsuitable to
changing marketing trends.
Production &Operatlon Management 2.23 Product Design

POINTS TO REMEMBER
A
product is a bundle of utilities.
Product design can be defined as the idea generation, concept development, testing
and manufacturing or implementation of aphysical object or service.
Factors affecting product design
1. Customer's Requirements and Psychological Effects
2. Facility to Operator
3. Functionality
4. Materials

5. Work Methods and Equipments

Value Analysis is the systematic application of recognised techniques which identify
the function of a product or service, establish a monetary value for the function and
provide' the necessary function reliably at the lowest overall cost.
Standardisation is the process of establishing standards or units of measure by which
quality, quantity, value, performance, etc. may be compared and measured.
`implification means elimination of superfluous varieties, sizes, dimensions, etc.
Product simplification means reducing the number of varieties. The other names for
simplification are unification or variety reduction.
Product policies are broad guidelines formulated by the top management of the
company with regard to product planning and development.
Product development is the process of designing, creating, and marketing an idea or
product.
The steps involved in new product development process are as follows:
1. New product strategy development,
2. Idea generation,
3. Idea Screening and evaluation,
4. Concept Development,
5. Testing.
6. Commercialisation.
Techniques of Product Development
1. Product Differentiation
2. Product Positioning
3. Product Simplification
4. Product Elimination
Production &Operation Menagement
224 Product D
QUESTIONS FOR DISCUSSION
Q1 State the meaning and importance of product design.
Q2 Explain the various factors affecting product design.
Q3 Explain the various steps in new product development.
Q4 What is standardisation? State its procedure and advantages
Q5 What is product development? State its scope and importance.
Q6 State the factors affecting product development.
Q7 Explain the various techniques of product development.
0.8 Write Short notes on:
(a) Product cdassification
(b) Value analysis
(c) Product simplification
(c) Strategic decision in product design.