4.1 Introduction

The development of a new product or a new technology, complex, interesting, and demanding though it may be in its own way, is really only as useful as the manufactured product that emerges from it. Without that useful output, sold either to the public or to a business customer, technology development is merely an intellectual exercise. It therefore makes sense that the development process, from the outset, should be aligned as closely as possible with the business and manufacturing strategy for exploiting it commercially. The emphasis here is on the word outset; seeking alignment after much effort has been invested is always less efficient and will run into ‘not invented here’ issues.

At the tactical level, this could simply mean that a new product should be designed so that it can be made easily – ‘design for manufacture’ – and that is always good practice.

However, there are some more fundamental considerations, such as:

• Who will make the various components of the product and who will assemble it?
• Will there be just one product, will there be various options, or will there be some level of customisation for a specific purchaser?
• Will it be simply sold and forgotten (unlikely), or will there be some supporting services afterwards?
• Will the manufacturer be selling the product as a service, effectively taking responsibility over the product's whole life?
• Will the manufacturer have to take some responsibility for disposing of the product at the end of its useful life?

4.2 Business Context

Manufacturing is often described, rather simplistically, as the conversion of raw materials into finished products. Whilst this is an accurate description of the mechanics of manufacturing, the process can be considered much more broadly: as well as being a material conversion process, it is also the route by which new technologies are converted into useful, saleable products; linked to this, it is the means by which more basic research is converted to economic output (something which always interests governments); and it also a means by which money such as personal savings can be turned into future economic returns, rather than just being kept under the mattress. These points are shown in (Figure 4.1):

So, in summary, rather than simply being the conversion of raw materials into finished goods, manufacturing plays a more strategic economic role in a number of different ways. The value‐adding activities also do not stop at manufacturing; logistics, delivery, installation, and service all make an economic contribution and widen the definition of ‘manufacturing’.

For these reasons, manufacturing is big business. It represents about 15% of the world's economic activity with a global turnover of some $10 trillion at 2005 prices (Figure 4.2) – see Ref. 1.

It is also a growing activity: over the period 1970–2015, the world's output of manufactured goods more than trebled, representing an annual growth rate of just under 3%.

4.3 Basis of Competition

It also follows that manufacturing is a very competitive, international activity. Manufactured products are mobile and can be shipped around the world quickly and cheaply. Any new product or technology therefore must be capable of fighting its corner against direct competition, as well as against alternatives or substitutes.

In this situation, the developers of new products and technology must decide on what basis they wish to compete. Michael Porter's work from the 1980s – Ref. 2 – gives some useful guidance. He identified three broad strategies that companies could consider (Figure 4.3):

1. Cost leadership
2. Differentiation
3. Focus

Taking each strategy in turn, cost leadership is the most direct form of competition and relies, as the name implies, on cost management being the driving force of the firm. This typically implies high market shares, economies of scale, heavy investment, tight cost control, and design for low‐cost and possibly local manufacturing, and easy service. In cost or price terms, this approach sets the benchmark or reference point for other forms of competition.

Differentiation, on the other hand, places more emphasis on design, brand image, durability, and high resale value. The product will command a higher price, although volumes and market share will be lower. The higher price will have to be in balance with the benefits of the product, and there will be a constant battle with lower price/lower specification products who will eat away at the differentiator's market share.

The focus strategy is essentially a niche approach where the appeal is to a narrow range of closely defined customers with whom an almost personal relationship can be built. Direct competition is relatively weak in this situation, but substitutes or alternatives must always be borne in mind.

For a firm developing a new technology or product, the appropriate strategy needs to be borne in mind to ensure that the new offering, and its manufacturing approach, are consistent with the chosen path. If the development is taking place within an established company, the approach will already be set. Where the company is a new entrant, realistically, the ‘niche’, or at best the ‘differentiation’, approaches are likely to apply on the basis that the costs and investments associated with ‘cost leadership’ will be too much for a new firm.

It could be argued that a fourth model of competition has emerged, or is emerging – concerned with the business model defining the relationship between supplier and customer. To a large extent enabled by technology, in the engineering world it revolves around ownership of the productive asset and the selling of it as a service by the manufacturer, rather than selling it as a product to an operator. In some fields, such as those created by Uber and Airbnb, the new business model has clearly created a new basis of competition.

4.4 The Value Proposition

Clarity over the positioning of a new development in the marketplace is clearly a critical issue, brought into focus by research findings that suggest that some 40% of new, launched products fail to be successful – Ref. 3. The failure rate for initial ideas will be much higher as most ideas fail to make it even to the first hurdle.

An effective way of addressing how a product should be positioned in a market is through a value proposition. The concept of the value proposition can be traced to work by the Atlanta office of the McKinsey organisation. Michael Lanning and Edward Michaels of that office wrote a McKinsey staff paper in June 1988 – Ref. 4 – which spoke of the value proposition as: ‘a clear, simple statement of the benefits, both tangible and intangible, that the company will provide’.

They went on to say: ‘And we are not talking about vague benefits, such as “good quality.” We mean concrete, observable features of the product or service’.

For example, the Airbus A380 is positioned as offering: ‘a 15 per cent lower cost per seat-kilometre than its rival large airliner’ – quite a clear statement of intent, although of course a large and complex product such as an airliner will have a long list of features and benefits which will appeal to the purchaser, the operator, and the flying customer but this is one clear, headline.

A good way of working on a value proposition, particularly if conducted as a facilitated group activity, is through a value proposition canvas, of which there are numerous, and sometimes copyrighted, models. They all follow a similar pattern in the form of a matrix relating the benefits of the product to the needs of the customer, ideally on an item‐by‐item basis.

Within the workshop environment, the customer's needs are documented and the benefits or features provided by the supplier are listed. Work is then done to Identify positively where benefits meet the customer's specific needs or where they avoid or reduce a specific customer problem. Each point should be specific and quantitative wherever possible and broad generalities should be avoided, as they are difficult to translate into engineering form.

Positive benefits are usually easy to identify – reduced operating cost per seat‐kilometre in the Airbus example above. Problems avoided, or ‘pains relieved’, require more mental agility but much improved reliability, for example, or reduction in service problems, might be examples of this. Again, these points can be quantified.

Doing this analysis as a group will open up new insights and put a different perspective on what is being developed for the customer.

A (hypothetical) example for a simple, low‐cost robotic system is shown in Figure 4.4.

The most important element of this work is the headline statement, which acts a guide and focal point for the new technology or product. This statement can also be built on by adding in more detailed product definition material and further information about how customer needs will be met – see Chapter 5 for more details. From this work, it will become more evident how the new product will compete – whether it could be a niche product, a cost leader, or a differentiated offering – and whether this is consistent with the company's chosen strategy.

4.5 Industry Structure

A further shaping factor is the structure of the industry into which the new product will be sold. The product may simply be made by one company and sold through its own sales outlets or through dealers, wholesalers, or retailers. Alternatively, the product may be incorporated into a further, more complex end‐product, such as an aircraft or road vehicle. Consider, for example, how a tail‐lift for a truck body, not a particularly complex product in its own right, finds its way into the market (Figure 4.5).

Identifying the real customer or customers, and other involved parties, is difficult in this situation but it is essential to understand who is, or are, the real customers, as well as understanding the operating environment for the product and who understands that particular point. These points underpin effective marketing.

The structure of the market may also determine whether one standard product is sufficient, or whether a range of options is needed, and how the product is ordered, as well as the lead time. These factors all have a bearing on new product development activities and need to be recognised explicitly during the commercialisation phase of product development.

4.6 Routes to Commercialisation

Having established the broad approach to defining a competitive product and the product's positioning in the marketplace, the route to commercialising the new product needs to be determined. It is not the purpose of this book to discuss the advantages and disadvantages of different routes. However, the choice of route is relevant to the technology development process in the sense that the design of the product carrying the new technology could be affected by how it is manufactured and how it is sold.

There are many routes to commercialisation, and the chosen approach will depend on the market and industry structure, as well as the barriers to entry, the status of the company developing the product and the funds available. Circumstance make dictate only one feasible route, especially if funds are limited (Figure 4.6).

In an established business, the route to market for a new technology or product is likely to be through existing, or adapted, sales, logistics, service, and support channels.

For a new undertaking, there are four possibilities:

1. Set up own manufacturing, sales, and support channels – which could require substantial time and investment but may be feasible if it is a fundamentally new market and a start can be made at modest volumes.
2. Subcontract manufacture and franchise sales and support – a similar strategy to the above but working with partners who may share some of the costs and liabilities (and rewards).
3. Sell the technology to an established company – which may be the only way forward if there are substantial barriers to entry to the planned market due, for example, to the manufacturing volumes required or the regulatory requirements of the market.
4. License the technology – which retains control of the product but which passes most of the reward to other parties and where copying is always a possibility.

Combinations of these strategies are also possible. For example, the company could retain some manufacturing capacity, from which it can learn and develop, but also license additional capacity in other territories or perhaps licence an earlier generation of products to protect the company's know‐how, provided this does not then create a new competitor.

4.7 Satisfying a Range of Customers

Henry Ford famously remarked, of the Model T in 1909, ‘Any customer can have a car painted any color that he wants so long as it is black’. He went on to say, ‘it will be so low in price that no man making a good salary will be unable to own one’. Black paint, incidentally, dried more quickly and was therefore cheaper.

He was clearly pursuing a classic cost leadership strategy and using absolute standardisation as one means of achieving this. His strategy worked well for quite some time, but he eventually had to bow to competition and be more flexible. In the twenty‐first century, the expectation is that customers can have almost anything they want.

When developing new products, a clear strategy is needed in terms of deciding how the requirements of different customers will be met. Ultimately, this is a business decision, and more variety generally means more cost but more volume. The choice has a major impact on manufacturing, purchasing, and logistics strategy and, in turn, on how products are engineered.

In principle, there are many options:

1. Just one standard product
2. A range of standard products
3. Standard products with pre‐engineered options
4. Standard products but with customer‐specific changes
5. Special product built to customer's requirements

In practice, different products and different industries have different approaches. Consumer goods tend towards the upper end of this list whilst products or system for business or industry tend to be more heavily customised. The general trend is towards mass customisation – a very wide variety of choice but at mass manufacturing costs.

The automotive industry is particularly adept at satisfying a wide range of customer needs with apparently different products whilst actually having a modest range of common platforms. Volkswagen Group, for example, manages at the time of writing to create almost 20 different models from its one Golf platform, covering VW, Audi, SEAT, and Skoda products.

Achieving this level of diversity from a common set of parts requires a planned and strategic approach from the outset – and it has taken Volkswagen many years and several iterations to arrive at this position. In principle, it means that the wide range of possible options need to be taken into account at the early stages of design. Split lines or a modular approach need to be built in, but in a way that does not create too much additional cost. In fact, there is always a trade‐off to be made between building in flexibility, on the one hand, and minimising product cost on the other hand.

The references above to small car platforms have, of course, built on the experience of several decades of producing a range of products from common platforms. When a substantially new product is being developed in a new or emerging company, it is much more difficult to predict what options customers might want, and it might take several generations of product to reach a situation where different customer's needs are understood and can be met by an efficiently engineered family of products.

This approach also acts as a strong driving force when it comes to manufacturing strategy.

4.8 Linking to Manufacturing Strategy

In an established company, there will almost certainly be a manufacturing strategy, possibly an unspoken one, that will shape the development of new technologies and products. It will cover topics such as:

• What the company chooses to make itself versus what it buys externally – ‘make‐vs.‐buy’
• How far afield it looks for its suppliers – close to the company or further afield with attendant transport costs and time lags
• Where it chooses to locate its manufacturing, which could be one central location or could be distributed globally
• What manufacturing processes it will consider or has the facilities and skills to pursue
• How it accepts orders and promises delivery timescales
• How it deals with the needs of different customers
• How it aligns its policies with government pressures

The development of new technologies and products cannot proceed very far without taking these points into account. For example, if a company has particular expertise in, and facilities for, certain manufacturing processes, it will want to use them in a new product, which, in turn, means that the product will have to be designed around them. In the case of an early‐stage company, some idea of likely manufacturing processes will be needed to assure manufacturing feasibility and to give some realistic idea of costs. In both cases, work will be needed with suppliers for purchased components for similar reasons.

It can be seen that it makes sense for technology and product development to proceed in close harmony with manufacturing and commercial strategy, which leads to the question – how best to achieve this?

4.9 Core Principles of Managing the Interface

The thrust of the preceding sections is to point out that technology development cannot proceed very far in isolation from broader business factors. In an established business, this means different groups collaborating together to bring in their combined experience and specialist knowledge. In a new business, it means investing effort in business considerations, however that is done, from an early stage. If these points are ignored, it is unlikely that an optimal solution will emerge, so there will be a need for backtracking or rework to bring the technology development in line with other factors.

The following principles should be borne in mind:

1. These considerations and activities should be programmed in from the outset.
2. Manufacturing and commercial objectives should be set from an early stage, as well as product objectives.
3. Engineers should adopt the principle of early release of preliminary information, accepting that it is imperfect, rather than waiting until all the details have been completed.
4. There should be intensive communication between all the interested parties from the earliest possible stage.
5. Structured methodologies can be used, typically in a collaborative environment, to work through these points.

The organisation's culture will have a considerable bearing on the success of this work. It is reliant on a collaborative, blame‐free culture to manage the interfaces and interactions between designers/developers, and commercial and manufacturing experts. These are often groups with different life philosophies, timescales, levels of pragmatism, and commercialism These points often underlie tensions between such groups but, in reality, one can't exist without the other. Ideally, the driving philosophy should be that mentioned in Chapter 1 – an engineer can do for a dollar what any fool can do for two.

The symptoms of poor interfaces are easy to spot – late redesigns, lack of empathy, product cost targets not met, and quality problems in manufacturing due to difficult operations – are just some examples. However, these issues can be overcome, which makes a big difference.

4.10 Design for Manufacture Methodologies

The principles established above lead into the design of individual components or assemblies.

‘Design for manufacture’ is a well‐established discipline at the level of the individual component, or the assembly or sub‐assembly operations. Usually, it is termed ‘design for manufacture and assembly’ (DFMA). Related to this there is ‘design for life‐cycle operation’, ‘design for maintenance’, and ‘design for disposal’, leading on to the more general umbrella term ‘DfX’.

There are many established methods for optimising the design in relation to these factors and many useful supporting publications. The classic reference in this field, Ref. 5, is by Boothroyd, Dewhurst & Knight, running over 700 pages and covering both assembly and most of the common component manufacturing processes. There are other books covering the same ground. Many consultancies operate specifically in this field, and there are technical conferences devoted just to this subject. Additionally, there are hundreds if not thousands of booklets from industries or individual companies describing how best to design individual components in a particular material or with a particular manufacturing process in mind.

At the level of the component, the basic guidelines relate to:

• Reducing or simplifying the features or complexity of a component
• Using readily available materials
• Not imposing difficult‐to‐achieve tolerances and surface finishes
• Using standardised sizes, e.g. for drilled holes
• Working to the limitations of the specific manufacturing process, e.g. spring‐back, draft angles, die withdrawal angles, or bend radii

Similarly, there are straightforward generic guidelines for the development of assembly operations:

• Reducing the number of parts or integrating multiple parts into one part (which runs somewhat counter to the component‐level guidance)
• Analysing the real need for each individual component
• Use of standard, low‐cost parts
• Use of click fasteners rather than threaded nuts/bolts/washers (which are also often the source of problems in service)
• Providing easy access, location, and vision for assembly work
• Avoiding very small, fiddly parts or conversely heavy and cumbersome parts
• Presenting parts in a way that eases assembly
• Reducing operations that require special tools or fixtures
• Assembling from one direction, using gravity, providing self‐locating or self‐aligning features, reducing assembly forces
• Reducing the need for orientation of parts through symmetry
• Reducing post‐assembly adjustment or setting operations

Organised or tabular worksheet methods of functional analysis can also be applied in a group workshop environment to optimise designs, sometimes supported by scoring systems that rate ‘design efficiency’ or ease of assembly or manufacture.

Putting aside specific aspects of a particular component or assembly, the key point is that DFMA activities should be built into the design process from the outset and not conducted as an afterthought or follow‐on process. Estimates suggest that some 70–80% of manufacturing costs are established by the design activity, so it pays to put effort into DFMA at an early stage. Once a design has been established, and probably tested and analysed, it becomes increasingly difficult and costly to change it and undo the investment already made in it even if the manufacturing cost reasons are quite compelling.

4.11 Design for New Methods and Materials

The points above relate primarily to existing material and manufacturing methods where there are already well‐established experience and good practice. The aim of design for manufacture work in this situation becomes one of optimisation and avoidance of poor solutions.

When a new material or a new method of manufacturing become available, the natural tendency is to design parts that closely resemble those which went previously using the earlier methods and materials. For example, the first plastic automotive body components looked remarkably similar to their steel predecessors. This is a product of conservatism and a lack of experience of what does, or does not, work in practice, plus the fact that replacing a conventional part on a one‐for‐one basis puts further boundaries on what can be achieved.

Once experience is gained, design concepts change more radically to take advantage of the new situation, not just at the level of the individual component but also in terms of the surrounding parts, the roles they play, how they are attached, and how they are configured.

An example is shown in Figure 4.7 of how a small component might be made differently, and radically so, using additive manufacturing methods. The new part might also be extended to perform some of the functions of the parts to which it attaches, resulting in one consolidated part in place of several components.

All these factors should be considered at an early stage and will ideally form part of a technology development programme preceding a product development programme. Leaving until later will reduce the opportunity to take full advantage of new technologies.

4.12 Design for Connectivity – Internet of Things

Some form of internet connectivity back either to the manufacturer or the asset owner is becoming a mandatory requirement for a wide range of engineering products from simple household electrical appliances through to major pieces of capital equipment. Computer diagnostic systems have done this since the 1980s. The purpose of doing so varies and could include:

• Simple remote control of devices by the owner
• Online monitoring of performance and subsequent adjustment of, for example, a production process
• Software maintenance or updates
• Measurement of service environment ahead of maintenance
• Measurement of duty cycle to aid future designs
• Anticipation of failure by, for example, measuring vibration, noise, currents, and voltages
• Measurement of usage where the product is sold as a service

At a practical level, the sensors and methods of communication need to be built into a product at an early stage to facilitate these features. Linked to this, the form of data analysis for information from the operating product need to be designed alongside the product itself. This, in turn, requires the nature of the service offered, and its associated business model, to be written into the business plan for the company as a whole. Hence, the use of IoT goes well beyond a purely technical issue.

4.13 Design for Environmental Considerations

Environmental factors play a big part in the development of new technologies and products. In fact, enhanced environmental performance, linked to energy generation or consumption, is one of the major drivers of new technologies. These factors can affect product development in several ways:

• Choice of materials from which the product is made, avoiding those which are in short supply or have environmental sensitivities.
• Reducing the energy consumption of the product itself and the harmful emissions from it. In many industries if not most, there are legal requirements to be met in relation to emissions.
• Reducing energy consumption of manufacturing processes, use of harmful chemicals and emissions or discharges from these processes. Again, legal requirements probably apply.
• Minimising the packaging of the product and using readily recycled materials.
• Planning the disposal or reuse of the product by, for example, choice of readily recycled material or simplifying disassembly.

A full life‐cycle cost of ownership assessment is one way of taking a holistic view of these factors and could be used to evaluate alternatives. These points can all be built into the plan for programmes of technology or product development and managed as requirements of that plan, alongside all other requirements.

4.14 Concluding Points

The key point of this chapter is the fact that the creation of new technologies or products cannot proceed as an independent activity, isolated from the rest of the world. Its ultimate aim is to create a successful business. This means that these broader considerations should be taken into account from the earliest possible stage. Factors to be considered include:

• How will the product compete?
• What are the key features that will appeal to a buyer?
• How is the market structured?
• Who are the customers?
• How will it be commercialised?
• How will the needs of different customers be met?
• How will the product be priced, and what are the cost targets?
• What environmental performance is required?
• What will the manufacturing strategy be?
• How will it be supported in service, and will there be a real‐time connection?
• How will the design detail be developed so it can be manufactured easily?

This is quite an array of questions, and they cannot all be answered on Day 1. Equally, failing to consider them from an early stage will almost certainly result in the wrong product or a difficult process of redesign where earlier work has to be repeated.

This highlights one of the most fundamental dilemmas of technology and product development, to which there is no easy answer. The most successful companies have found ways in which different areas of the company are able to cooperate in bringing the widest possible perspective to early stage work. It requires a very positive culture for it to work. All involved to be able to take a strategic view; for example, there needs to be a clear view of manufacturing and supply strategy. The engineers originating the ideas need to be especially tolerant or thick‐skinned as their ideas are put through the mangle.

Senior managers have their role to play in creating the right climate. They also need to be supportive but willing to take difficult decisions, killing off initiatives that are going nowhere. It might be thought that these comments are solely the province of the larger company. Small companies face exactly the same issues. They need to go through the same thought processes and make the same decisions. In their favour, this may only involve a few people and limited bureaucracy or levels of authority.

References

This comprehensive international database can be used to analyse GDP and the contribution of manufacturing (and other sectors) country by country:

1. 1 United Nations Statistics Division — National Accounts Main Aggregates Database, GDP and its breakdown at constant 2005 prices in US Dollars

Michael Porter's book is one of the classics of business management:

1. 2 Porter, M.E. (2012). The Competitive Strategy: Techniques for Analyzing Industries and Competitors. New York: Free Press.

This paper provides some interesting information about how frequently new products succeed or fail in the marketplace:

1. 3 Castellion, G. and Markham, S.K. (2013). Perspective: new product failure rates: influence of argumentum ad populum and self‐interest. Journal of Product Innovation & Management 30: 976–979.

This McKinsey paper is the origin of the concept of the value proposition:

1. 4 A business is a value delivery system Michael J. Lanning and Edward G. Michaels, McKinsey staff paper dated June 1988

Boothroyd's book is another classic, this time dealing with design for manufacture and assembly:

1. 5 Boothroyd, G., Dewhurst, P., and Knight, W.A. (2011). Product Design for Manufacture and Assembly, 3e, 650. Boca Raton, FL: CRC Press.