As the competitive environment rises and the life cycle of a product decreases in length it becomes more and more important to develop products cost efficiently. Products do not yield profit for as long as they used to. Therefore the costs spent have to match the achievable outcome. Moreover, the technology pace harbors the risk that a product that went trough a long development process might already be outdated when it is ready for market emerge. Today’s companies face the challenge to provide quality products that are up to date and yet at a low price. The money spent on development and production has to be distributed wisely. The rationalization of the design process helps through various approaches to reduce the costs and still remain the products quality. This paper will examine the approach of applying rationalization to the design process. It will outline the potential of reducing costs and gaining market share through faster market emerge.
Table of Contents
1. INTRODUCTION
2. LIFE CYCLE OF A PRODUCT
3. THE DESIGN DILEMMA
4. HOW TO DESIGN NEW PRODUCTS – THE VDI 2221
5. REDUCE COSTS THROGH RATIONALIZATION
6. CONCLUSION
Research Objective and Core Themes
This paper explores how the rationalization of product design processes can effectively reduce development costs, decrease time-to-market, and ultimately increase market share in a highly competitive environment. By analyzing established design guidelines and efficiency measures, the study provides a framework for companies to transition from costly development cycles to more streamlined, routine-based design operations.
- Analysis of the "design dilemma" regarding cost determination.
- Application of the VDI 2221 guideline for systematic product development.
- Implementation of rationalization measures like modularity, size ranges, and standardization.
- Optimization of product life cycles to maintain competitive advantage.
- Strategies for reducing mental effort through routine work and efficient process management.
Excerpt from the Publication
3. THE DESIGN DILEMMA
Even though the design process itself does not cause a large amount of the overall costs, it still determines the biggest amount of the overall costs of a product (Figure 3). The design dilemma states that about 70% of the product costs are determined by the design, while the design only causes 2%-10% of the product costs.
However, the importance of rationalizing the design process is not justified by the costs that are caused by it but by the importance of the time to market. Again, if the design process takes too long, the product is not up to date anymore or competitors may have prior emerged a product. The company would be left with only a small share of the possible market potential in this segment. Moreover, due to large efforts in the areas of efficiency enhancement and rationalization of the production process there is not much potential left to further reduce costs. Therefore the importance of the design process has grown even further [9]. It is not all about reducing the costs of the design process but to shorten the design process through rationalization to emerge products prior to the competitors and gain market share (Figure 1). Therefore, rationalization of the design process of new products means: reducing costs due to consumption of resources, shorten the design process, emerge products prior to competitor and gain market share. To understand the main approaches to rationalization we will take a look at the process of development and design – the VDI 2221.
Summary of Chapters
1. INTRODUCTION: This chapter outlines the shift from seller’s to buyer’s markets and establishes the necessity of designing products to cost to maintain competitiveness.
2. LIFE CYCLE OF A PRODUCT: This section defines the three traditional phases of a product life cycle and explains how resource consumption and profit generation evolve over time.
3. THE DESIGN DILEMMA: This chapter details how the design phase predetermines the majority of product costs and underscores the critical importance of minimizing time-to-market.
4. HOW TO DESIGN NEW PRODUCTS – THE VDI 2221: This chapter introduces the VDI 2221 guideline as a systematic approach to structure the design process and avoid costly errors.
5. REDUCE COSTS THROGH RATIONALIZATION: This chapter proposes specific measures, such as standardization, modularity, and avoiding iterative loops, to increase process efficiency.
6. CONCLUSION: This final chapter synthesizes the findings, emphasizing that rationalization reduces costs by replacing unplannable mental effort with routine-based processes.
Keywords
Rationalization, design process, VDI 2221, cost reduction, market share, time to market, design dilemma, modularity, standardization, product life cycle, efficiency enhancement, resource smoothing, innovation, development costs, buyer's market.
Frequently Asked Questions
What is the core focus of this research?
The work focuses on how companies can optimize their design and development processes to reduce costs, remain competitive, and shorten the time required to bring new products to market.
What are the primary themes discussed in the paper?
Key themes include the VDI 2221 systematic design approach, the concept of the "design dilemma," the life cycle of products, and various rationalization strategies such as modular design and standardization.
What is the main objective of the author?
The primary objective is to demonstrate that rationalizing the design phase is essential for companies to gain a market lead and maximize profitability in a fast-paced technological landscape.
Which scientific method is utilized in this paper?
The paper utilizes a structured analytical approach based on engineering guidelines (VDI 2221), process evaluation techniques, and the critical assessment of product life cycle management.
What is covered in the main body of the text?
The main body covers the analysis of product cost drivers, the application of VDI 2221 for systematic design, and an extensive examination of rationalization measures like size ranges, modularization, and process efficiency.
Which keywords define this work?
The work is defined by terms such as Rationalization, design process, VDI 2221, cost reduction, market share, and modularity.
How does the "design dilemma" affect product profitability?
It highlights that while the design process causes only a small fraction of actual costs (2-10%), it predetermines about 70% of the total product costs, making it the most critical phase for economic efficiency.
Why should companies avoid "jumping back" into previous process steps?
According to the paper, iterative loops are time-inefficient, prone to creating confusion due to document versioning, and often render subsequent work steps useless, thereby increasing costs and delaying market emergence.
What is the role of the VDI 2221 guideline in rationalization?
VDI 2221 serves as a structured framework that lists necessary design steps, allowing them to be performed systematically, which reduces the need for "mental effort" and enables processes to be completed more reliably and quickly.
How can modularity help in the design process?
Modularity allows complex products to be divided into smaller, independent modules that can be reused and improved, significantly reducing development time and effort compared to starting every design from scratch.
- Citar trabajo
- Alexander Voets (Autor), 2009, How to reduce costs and increase market share through rationalization of the design process of products, Múnich, GRIN Verlag, https://www.grin.com/document/152450
