Research Papers: Design Theory and Methodology

Over-Design Versus Redesign as a Response to Future Requirements

[+] Author and Article Information
Jeffrey D. Allen

Department of Civil and Environmental
Brigham Young University,
Provo, UT 84602
e-mail: jeffallen@byu.edu

Phillip D. Stevenson

Department of Mechanical Engineering,
Brigham Young University,
Provo, UT 84602
e-mail: philstevenson91@gmail.com

Christopher A. Mattson

Department of Mechanical Engineering,
Brigham Young University,
Provo, UT 84602
e-mail: mattson@byu.edu

Nile W. Hatch

Marriott School of Management,
Brigham Young University,
Provo, UT 84602
e-mail: nile@byu.edu

1Corresponding author.

Contributed by the Design Theory and Methodology Committee of ASME for publication in the JOURNAL OF MECHANICAL DESIGN. Manuscript received March 30, 2018; final manuscript received December 14, 2018; published online January 10, 2019. Assoc. Editor: Irem Tumer.

J. Mech. Des 141(3), 031101 (Jan 10, 2019) (13 pages) Paper No: MD-18-1264; doi: 10.1115/1.4042335 History: Received March 30, 2018; Revised December 14, 2018

Though little research has been done in the field of over-design as a product development strategy, an over-design approach can help products avoid the issue of premature obsolescence. This paper compares over-design to redesign as approaches to address the emergence of future requirements. Net present value (NPV) analyses of several real world applications are examined from the perspective of manufacturers (i.e., defense contractors, automobile, pharmaceutical, and microprocessor manufactures) and customers (i.e., purchases of vehicles, televisions, cell phones, washing machines, and buildings). This analysis is used to determine the conditions under which an over-design approach provides a greater benefit than a redesign approach. Over-design is found to have a higher NPV than redesign when future requirements occur soon after the initial release, discount rates are low, initial research, and development cost or price is high, and when the incremental costs of the future requirements are low.

Copyright © 2019 by ASME
Topics: Design
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Grahic Jump Location
Fig. 1

Simplified cash flow comparisons of initial design, redesign after initial design and over-design approaches from manufacturer's and customer's perspective. Colored areas represent the revenue and cost flows, included in each cash flow, over time, as noted in the legend. Arrows represent one-time costs. When two arrows are stacked the upper arrow represents the price or cost of the product that meets the initial requirements. The lower arrow represents the additional price or cost associated with meeting the future requirements. Stars designate the timing of product availability for sale or purchase.

Grahic Jump Location
Fig. 2

Sampling of manufacturing and customer purchase applications. The horizontal axis is an indication of the investment (R&D cost or price). The vertical axis represents the ongoing cost, either COGS (for the manufacturer) or in-service cost (for the customer) normalized by the R&D cost or price, respectively. These normalized values are selected because of their significance in Eqs. (9) and (13). As indicated in the figure, defense contractors, microprocessor suppliers, vehicle and building purchases are chosen as diverse examples to be analyzed in detail. Data are from the following Refs. [4770].

Grahic Jump Location
Fig. 3

The impact of the timing of emergence of future requirements on the NPV of the over-design and redesign approaches. Applications 1 and 2 (first and second graphs from the left) are from a manufacturer's perspective. Applications 3 and 4 (third and fourth graphs from the left) are from a customer's perspective.

Grahic Jump Location
Fig. 4

Sensitivity analysis. The impact on the emergence curves (NPV of over-design minus NPV of redesign) of variations in discount rate, incremental R&D cost (or price), initial R&D cost (or price), incremental COGS (or in-service cost) and incremental R&D cost (or price) of only the redesigned product: (a) sensitivity of discount rate, (b) sensitivity of R&D cost or price due to initial requirements, (c) sensitivity of incremental R&D cost or price due to future requirements, (d) sensitivity of incremental COGS or in-service costs due to initial requirements, and (e) sensitivity of incremental R&D cost or price of the redesigned product.



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