Idea Generation:
Product ideas or investment opportunities come from different sources such as business/financial newspapers, research institutes, consulting firms, natural resources, universities, competitors etc. The starting point for idea generation could be a simple analysis of the business's strengths and weaknesses.
Ideas could also be generated through brainstorming, desk research and various types of management consensus procedures.
Evaluation:
Screening of product ideas is the first step in evaluation.
Each identified Product/Investment opportunity needs to be adequately evaluated.
A pre-feasibility study of the product market, technical and financial aspects is necessary at this stage to have a clear picture of the associated cost and benefits.
A pre-feasibility is a preliminary version of a feasibility study.
It is usually carried out for large and complex products/projects to determine whether to proceed to a more elaborate feasibility study.
Choice:
A choice is made of a product which is commercially viable, technically feasible and economically desirable.
At this stage, the necessary machinery are set in motion.
Causes of Product Failure
A wrong choice when made often leads to product failure. Product failure may be caused as a result of one or a combination of the following:
Management oversight during the basic planning stages – initial research may be either inadequately done or bungled in the interpretation.
Subtle changes in the market. For instance, competitors may introduce a competing product into the market unexpectedly.
Lack of sound market appraisal.
Product problems and defects e.g. the manufacturing of a product that is too costly or too complicated.
Inadequate marketing support. For Instance, the company may have rated the product so high in the market that they cut back on promotion.
Lack of consumer education about the product.
Product Modification
Product selection is one thing; the sustainability of the product in the market is another thing entirely.
They need to at least stabilize the sale of the product.
This is where product modification comes in because of the dynamic nature of the business environment.
However, the technique to use to modify a product is dependent upon the circumstance of the product about the buyer.
There are some possible alternatives for product modification,
Namely:
Quality improvement – This aims at strengthening the competitive position of the product. The improvement may be in the appearance or end-use.
Feature improvement – This is to increase the number of real or imagined product benefits.
Style improvement – aims at improving the aesthetic appeal of the product rather than its functional performance.
Service improvement– e.g. technical advice, faster supply, breaking bulk, etc. Often used by smaller companies competing with large ones.
Promotional benefits– e.g. giveaways competitions, etc. are used to add value to the product.
Facilities for selected products
Raw materials: for instance, Nigeria is endowed with natural resources. Indeed, all the raw materials requirements of most industries in Nigeria can be sourced locally. Businesses for which Nigeria has a comparative advantage in terms of raw materials availability, viability and market opportunities include:
– derivatives production
– Ginger processing
– Rubber production
– Sugar production
– OIL seed chemicals production
– Kaolin processing
–Granulated limestone production
– Crude salt processing etc
Other factors to consider are ;
Choice of technology
Infrastructure facility
Product Design
Product design is one of the crucial stages in Operations Management.
The basic limiting characteristics of the production system design are set during the product design phase.
The conscious effort to design for low manufacturing cost is often referred to as product design.
Given the product design, process planning for manufacture must be carried out to specify the process required and the sequence of the processes.
The two basic steps in designing a product are functional design and production design
Functional Design
In the functional design step, the product is designed to be functional.
Decisions are made on dimensions, materials to be used, type of final finish required for appearance and so on.
At this stage, the designer is more concerned with the product itself than the methods of production.
The main concerns are functional considerations, customer appeal, cost and ease of operation and maintenance.
Production Design
In the production design stage, the designer considers the introduction of modifications and new concepts into the product to make it more suitable for production.
Some of the concepts employed in this stage include:
Standardization:
The designer can facilitate the production of the part by standardization of a port or the whole product.
Standardization can also cut production costs by eliminating the need for planning for several different product varieties.
It allows firms to work larger and often economical, quantities of fewer items.
However, standardization has limitations such as forestalling improvements and fewer options for customers.
Modular Design:
Modular Designs facilitate production and maintenance.
This type of design is used extensively in computers.
Products are made easily detachable subassemblies or sections.
Simplification:
Sometimes the designer may include some features in the design that, although not very critical to the function of the product, create severe problems in the production stage.
To correct these situations, sometimes some parts of the design must be simplified.
Once developed, many products also undergo value analysis (value engineering).
This is an attempt to see if any materials or parts can be substituted or redesigned in such a way as to continue to perform the desired or intended function but at a lower cost.
The nature of product design can affect costs in a wide variety of cost categories, going far beyond the direct labour and material costs involved.
A list of categories affected by product design includes:
Raw material
Equipment
Direct Labor
Indirect labour
Tooling
Engineering
Sales and administration
Many of the indirect costs tend to be hidden.
For example, the number of individual parts in a design can drastically affect the indirect costs due to greater paperwork and the greater cost of ordering, storing and controlling the larger number of parts.
Thus, the selection of product design must reflect consideration of all the foregoing factors.
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