1. Product design and process selection
Benchmarking
Idea development
Technology push
Marketing pull
Product screening
Marketing criteria
Financial criteria
Operational criteria
Preliminary design and testing
Prototyping
Trial marketing
Final design
Reverse
Engineering
Concurrent
Engineering
Value
Engineering
Breakeven
Analysis
Remanufacturing

2. Concurrent Engineering
Concurrent engineering can be defined as the simultaneous development of project design functions, with open and interactive communication existing among all team members for the purposes of reducing time to market, decreasing cost, and improving quality and reliability.

3. The product life cycle Sales Profit
Every product and service follows a life cycle that spans:
Planning
Introduction
Growth
Maturity
Decline
Healthy companies manage their product and service offerings to insure a balanced portfolio
Sales
Dollars
Profit
Plan Intro Growth Maturity Decline

4. The process-focused Project Shop
Characteristics
Makes a one-of-a-kind product (volume = 1)
Uses general purpose equipment
Has informal relationships with many vendors
Very little vertical integration
Flexible layout often with factors of production moving to job

5. The Job Shop Characteristics Makes many products in small volume
Uses general purpose equipment
Has informal relationships with vendors
Very little vertical integration
Departmentalized layout with chaotic flow

6. (Cell, Flow or Hybrid Shop)
The Large Batch
(Cell, Flow or Hybrid Shop)
Characteristics
Makes several families of products in moderate volume
Uses general purpose equipment often fixtured
Little vertical integration
Hybrid layout with flow lines

7. The Assembly Line Characteristics Makes few products in large volume
Uses specialized high-volume equipment
Has formal relationships with vendors
May use vertical integration
Product-based layout with linear flow

8. Breakeven Analysis
Fixed cost
Variable cost
Total cost
Revenue
Cost
Used to determine volume needed to cover total costs
Often first step in product development process
Assumes linear costs
Volume

9. Breakeven Example
A firm is considering marketing a new toothbrush. The firm expects to sell each toothbrush for $ The per brush cost of material, labor and overhead equals $ The required investment in plant and equipment is $50,000.
How many brushes must be sold for the firm to breakeven?
If only 65,000 brushes are expected to sell, what must the variable costs be in order to allow the firm to breakeven?

10. Break-even Analysis Example
The Stroudwater Street Service Station is looking to invest in a new fully automated car wash. They have collected the following information on three different models.
Initial Variable
Investment Cost (car)
a) VacuClean System ,
b) Wash n Scrub Model III 400,
c) DynoClean ,
a & b
b & c
a & c

11. Car Wash Break-even Analysis Continued
VacuClean
Wash n Scrub
DynoClean
Total Cost
550,000
400,000
250,000
500,000
545,454
600,000
Volume

12. Car Wash Break-even Analysis Continued
If we were able to charge $1.75 for a car wash, at what volumes would we breakeven?
Initial Variable
Investment Cost (car)
a) VacuClean System ,
b) Wash n Scrub Model III 400,
c) DynoClean ,
a) 250,000/ =1,000,000
b) 400,000/ = 727,272
c) 550,000/ = 687,500
Note that the best profit-making process decision is
Dynoclean and only if demand is greater than 687,500