The Changing Impact of Product Design for a Company
AbstractThe paper presents the strategic importance of the manufacturing function for a company with a particular focus on the evolving product design and its importance. The production paradigm has changed from the start of industrial evolution to the mass production era, further to lean manufacturing, and finally to a focus of customization. In the course of changing manufacturing, the product design has also changed. The old pattern of designing products according to customer needs is still valid. In the early days of industrial production customer needs could be fulfilled by product design feasible for mass production. This is no more possible as the requirements of customers have become wider and more specific. Customization in product design includes the idea of serving all the varying customer needs, while carrying out production as effectively as possible. This aim can be reached if modern methods of product design are applied. The paper shows how advanced product and product family design can influence the competitive advantage of the company. This aspect includes ideas of standardization, modularization, and product platform design. This way many strategic benefits can be achieved. The need for advanced product and product family design is caused by such factors as increasing customer requirements, evolving production paradigm, and opening worldwide market. On the other hand, utilization of modern information systems makes it possible to handle the large amount of information caused by the increased product variation. The various aspects of evolving product design are discussed, including standardization, modularization, product platform design, and mass customization of products. They all aim to offer the customers exactly the products they need. At the same time, the advanced product and production design makes it possible to serve the customers in a cost effective way. These qualifications have a great impact on corporate strategy and the competitive advantage of the company. In the opening market the cost advantage in production is seldom a sustaining competitive advantage. The competition from low cost countries cannot be avoided in an open market. It is claimed that the factors of production which have qualitative features being valuable, rare, inimitable and non-substitutable could give competitive qualities for products of a company. With these features the products can avoid direct price competition. If the product and production design can combine customization and cost effectiveness with the features of being valuable, rare, inimitable and non-substitutable, sustaining competitive advantage can be achieved for a while.
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Bibliographic InfoPaper provided by Tallinn School of Economics and Business Administration, Tallinn University of Technology in its series Working Papers with number 174.
Date of creation: 2008
Date of revision:
Publication status: Published in Working Papers in Economics.School of Economics and Business Administration,Tallinn University of Technology (TUTWPE), Pages 85-90
paradigms of production; production modes; product design; customer requirements;
Find related papers by JEL classification:
- L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
- M11 - Business Administration and Business Economics; Marketing; Accounting - - Business Administration - - - Production Management
- M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-10 (All new papers)
- NEP-KNM-2008-05-10 (Knowledge Management & Knowledge Economy)
- NEP-MKT-2008-05-10 (Marketing)
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