Economic Viability of Component Management For a New Product Design

Abstract

A number of companies today, typically have multiple autonomous divisions or subsidiaries engaged in designing, manufacturing and selling products to customers. Some of them have undergone significant mergers and acquisitions, further compounding organizational complexity. Invariably, a proliferation of suppliers, parts, components and materials occurs that is impossible to control without enterprise-wide decision support processes and standardized content on parts, components, materials and suppliers. Product designers are under pressure to get it right the first time and do it fast (Anonymous – Knowledge base 1999; Floyd 1998; Smith 1995). Decisions they make are critical to product success and the company’s bottom line. During the first 10% of the product development cycle, decisions made affect up to 80% of the final product cost, and also have repercussions downstream in manufacturing and service for years (Kosanke, Vernadat and Zelm 1999).

Adapted from the paper by authors: Kumar, Sameer and Chandra, Charu, (2001), “Economic Viability of Component Management for a New Design – A Case Study”, The Engineering Economist, Vol. 46, No. 3, pp. 205–219.