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Product life Cycle of Engineering Design and Manufacturing

Posted: Tue Oct 09, 2012 10:27 am
by subham
Every product goes through a cycle from birth, into an initial growth stage, into a relatively stable period, and finally into a declining state that eventually ends in the death of the product (Fig. 1). Since there are challenges and uncertainties any time a new product is brought to market, it is useful to understand these cycles.
In the introductory stage the product is new and consumer acceptance is low, so sales are low. In this early stage of the product life cycle the rate of product change is rapid as management tries to maximize performance or product uniqueness in an attempt to enhance customer acceptance. When the product has entered the growth stage, knowledge of the product and its capabilities has reached an increasing number of customers, and sales growth accelerates. There may be an emphasis on custom tailoring the product by making accessories for slightly different customer needs. At the maturity stage the product is widely accepted and sales are stable and are growing at the same rate as the economy as a whole. When the product reaches this stage, attempts should be made to rejuvenate it by the addition of new features or the development of still new applications. Products in the maturity stage usually experience considerable competition.

Thus, there is great emphasis on reducing the cost of a mature product. At some point the product enters the decline stage. Sales decrease because a new and better product has entered the market to fulfill the same societal need.

During the product introduction phase, where the volume of production is modest, expensive to operate but flexible manufacturing processes are used and product cost is high. As we move into the period of product market growth, more automated, higher-volume manufacturing processes can be justified to reduce the unit cost. In the product maturity stage, emphasis is on prolonging the life of the product by modest product improvement and significant reduction in unit cost. This might result in outsourcing to a lower-labor-cost location.

If we look more closely at the product life cycle, we will see that the cycle is made up of many individual processes. In this case the cycle has been divided into the premarket and market phases. The former extends back to the product concept and includes the research and development and marketing studies needed to bring the product to the market phase. This is essentially the product development phase. The investment (negative profits) needed to create the product is shown along with the profit. The numbers along the profit versus time curve correspond to the processes in the product life cycle. Note that if the product development process is terminated prior to entering the market, the company must absorb the PDP costs.