An integral part of product development and a significant overlap between New Product Development and Manufacturing is the qualification of the actual product. Cost to Manufacture is a key input to the overall Cost of Goods (COG’s) – as such if a business is considering developing a new product for the market, whether this is a disruptive new innovation or an idea extension of an existing product – selling the idea to new customers involves indicating what the cost will be. Customers will not commit to purchasing, let alone provide retail space, if they do not know in advance how much it will cost.
With that in mind, the multifunctional teams in product development, marketing, and manufacturing all have a part to play in ‘Design for Manufacture’. In certain sectors, especially Fast Moving Consumer Goods (FMCG) the operating margins are so slim that every element of the product cost is pre-determined to ensure that once development and qualification is completed, the actual COG’s are in line with the target COG’s when the project was conceived.
Any introduction of a new product into manufacturing operations – even if it is a simple artwork change on packaging will require some degree of qualification.
Most refined manufacturing businesses will have their own qualification processes, yet many will operate a Stage-Gate Process.
A Stage-Gate process is a project management technique in which an initiative or project is divided into distinct stages or phases, separated by decision points. At each gate, continuation is decided by a manager, steering committee, or governance board. Said another way, it is a Go/No go tool. Unless you meet the success criteria for each gate, you cannot move onto the next stage. The purpose of this is to ensure:
- Qualification success Criteria are clearly defined
- Decision making is done in a robust objective fashion
- Investment is carefully controlled
- Poorly qualified products don’t get to market
Now our manufacturing team have worked closely with the rest of the business on the development of the new trainers. They have done testing, refined the perfect design (beta-testing) and they have prepared to begin production, anticipated potential problems and found solutions should they need them!
Essentially manufacturing processing is the production of goods to be sold to the customer by taking raw materials and converting them into a product, item or service that can be sold to a customer, in our case, a pair of trainers.