The Hidden Costs of Poor Concept Designs

hidden-cost

Product design is a cross-functional, knowledge-intensive task that has become increasingly important to the survival of manufacturers in today’s fast-paced, globally competitive economy. The pressure to design and manufacture innovative new products has increased largely because today’s consumers demand greater product variety.

Successfully conducting a thorough conceptual design phase and exploring many concept designs is key to the ultimate market success of a new product. During this stage, designers will create a multitude of sketches, not just on paper but possibly quick 3D models. The value of sketching is less in the sketches or models themselves, but in the cognitive process of working through dozens of ideas, or considering as many options as possible, and allowing each new option to raise new questions.

The conceptual design phase provides a description of the proposed product in terms of a set of integrated ideas and concepts about what it should do, behave, and look like. The designers involved in the generation of proposed ideas/concepts define both the aesthetics and functionality of the product. Questions are posed, such as: who is the product aimed at? What benefit will they expect? How do we plan to position this product in the market? How is it different from our competitors’ products?

The concept design phase is when multiple ideas are flushed out, weighed against design requirements, and sifted through until the best concept is determined and moved downstream to detailed design. The problem is often this stage of design is rushed due to external pressures. As a result, often teams will rush to pick a good concept without evaluating a sufficient number of alternatives. The problem with this “it’s good enough” mentality is that there are no second chances once designs have been committed to and moved forward in the design cycle.

In a recent study entitled, Trends in Concept Design, conducted by PTC, participants indicated that process of concept design development is often adversely affected by time constraints. Of the 214 respondents, 60% either agreed or strongly agreed that the concept design process at their respective companies is often cut short due to schedule issues. When asked if they thought their company would benefit hugely from exploring more design alternatives during concept design, the vast majority (80%) replied yes.

Manufacturers also should capture concept ideas that are not pursued; as often these are concepts often represent the better idea. According to the PTC survey, 90% of respondents responded that it was important to capture unsuccessful ideas as well, though only 34% of respondents reporting having a process in place that centralized and managed these passed-on concept ideas.

Selecting bad concepts to develop can lead to serious costs, measured both in terms of lost market share, dissatisfied customers, and lost money and time. By conducting a thorough conceptual design phase, manufacturers can avoid false starts, wrong positioning, poor strategy, and selling to the wrong people. By adequately vetting proposed designs, design teams can also avoid pushing bad designs forward as downstream changes come at a much larger cost, in terms of lost cycle time, wasted effort, and lost revenue.

Estimates show that despite an uptick in the number of new products hitting the market, the failure rate is still high. One study shows that only 40% of consumer products on the market today will be around five years after introduction and most estimates indicate that the failure rate for new products exceeds 80%.

So why do new products fail at such a high rate? Some product fail due to poor marketing efforts, such as incorrect positioning in the market, high pricing, or overestimated market size. However, some products fail because the wrong idea/concept was chosen. Estimates show that nearly half (46%) of all resources allocated to new product development by U.S. firms is spent on failed products.

An inadequate number of design concepts explored is often to blame. Gary Hamel, a well-known management strategist and writer, says that of 1,000 new ideas, only 100 have any commercial merit, and of those only 10 will warrant a substantial development efforts, and of those, only a couple will turn out to be a success in the market.

The bottom line: new product development is a numbers game and the more ideas and concepts your concept team is allowed to evaluate, the better your organization’s chances of finding a concept that will achieve commercial success.

Image by opensourceway

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