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The
Six Pillars of New Product
Success
Continued
By David Clark, New Business Development
Manager,
the Malco Design & Deliver Group
This is the third installment on the importance of project
pre-design preparation. If for some reason you missed a
previous installment, please view
back issues of the
newsletter.
In April
we discussed our first pillar, the importance of having
a solid understanding of your customer through market
research.
Last month we talked about the second pillar,
documenting
your customers' requirements.
Projecting
unit volume is the third pillar. The projected unit
volume
will drive every major design, manufacturing, and
marketing
decision you will make.
All too
often, companies seek to get the "lowest cost" per
unit. Pursuit of this goal can lead to all kinds of problems,
not
the least of which is being unprofitable. The better goal
is
to pursue the "lowest total cost", and the most
reliable way to
achieve this goal is by correctly matching your anticipated
unit volume to the manufacturing process.
Projects
that expect high sales volumes will need high volume
manufacturing methods to be able to keep pace with demand.
While these processes typically have higher tooling and set
up costs, the costs can be spread over significantly larger
batch sizes. Low "per unit" costs can be obtained
through
manufacturing
efficiency.
Projects
with lower volumes however, will not be able to justify
the tooling and set up costs as easily; and the large batch
sizes can force companies to stretch their resources to reach
the minimum order requirements. When this happens a whole
series of problems come into play - increased investment in
inventory, storage costs, finance costs, risk of obsolescence,
and a loss of flexibility to name a few. The result can be
hidden costs that sap profits from the company.
Regardless
of the manufacturing process you ultimately
choose,
the design of your product will have to consider, and
adapt
to, the needs and limitations of that process.
For more
information on projecting unit volume, and
incorporating
manufacturing process needs into your design,
please
feel free to call a member of our staff.
Next
month, the fourth pillar: Physical Properties.
Go
back to Malco Newsletters
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