ME 497 part 1 - 2 Chapter 1 The economic success of most...

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Unformatted text preview: 2 Chapter 1 The economic success of most firms depends on their ability to identify the needs of customers and to quickly create products that meet these needs and can be produced at low cost. Achieving these goals is not solely a marketing problem, nor is it solely a design problem or a manufacturing problem; it is a product development problem involving all of these functions. This book provides a collection of methods intended to enhance the abilities of cross-functional teams to work together to develop products. A product is something sold by an enterprise to its customers. Product development is the set of activities beginning with the perception of a market opportunity and ending in the production, sale, and delivery of a product. Although much of the material in this book is useful in the development of any product, we explicitly focus on products that are engineered, discrete, and physical. Exhibit I-I displays several examples of products from this category. Because we focus on engineered products, the book applies better to the development of power tools and computer peripherals than to magazines or sweaters. Our focus on discrete goods makes the book less applicable to the development of prod-ucts such as gasoline, nylon, and paper. Because of the focus on physical products, we do not emphasize the specific issues involved in developing services or software. Even with these restrictions, the methods presented apply well to a broad range of products, includ-ing, for example, consumer electronics, sports equipment, scientific instruments, machine tools, and medical devices. The goal of this book is to present in a clear and detailed way a set of product devel-opment methods aimed at bringing together the marketing, design, and manufacturing functions of the enterprise. In this introductory chapter we describe some aspects of the industrial practice ofproduct development and provide a roadmap ofthe book. Characteristics of Successful Product Development From the perspective of the investors in a for-profit enterprise, successful product devel-opment results in products that can be produced and sold profitably, yet profitability is often difficult to assess quickly and directly. Five more specific dimensions, all of which ultimately relate to profit, are commonly used to assess the performance of a product de-velopment effort: Product quality: How good is the product reSUlting from the development effort? Does it satisfy customer needs? Is it robust and reliable? Product quality is ultimately reflected in market share and the price that customers are willIng to pay. Product cost: What is the manufacturing cost of the product? This cost includes spend-ing on capital equipment and tooling as well as the incremental cost of producing each unit of the product. Product cost determines how much profit accrues to the firm for a particular sales volume and a particular sales price....
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This note was uploaded on 10/24/2010 for the course ME ME 497 taught by Professor Bush during the Spring '10 term at Michigan State University.

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ME 497 part 1 - 2 Chapter 1 The economic success of most...

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