A New Approach to Product Development & Design through Quality Function Deployment and Target Costing

Increased competition, spiralling costs and vocal customers have made it imperative that every organization should upgrade its processes constantly to stay ahead of the competition. This is achieved mainly through product development, process designs and cost reductions. It is of paramount importance for the firms to identify the right products and the right methods for manufacturing the products.

Quality Function Deployment (QFD) is becoming a widely used customer-oriented approach and tool in product design. Conventional QFD is technically one-sided which attempts to maximize customer satisfaction without taking into account any financial factors and the associated uncertainties in the product design process. Product design and development is a techno-economic process, hence there is always a trade-off between design goals and cost constraints. On the other hand. Target Costing (TC) is a method that takes financial, manufacturing and customer aspects into consideration during designing phase and helps firms in making product design decisions to increase the profit of the company. TC is a strategic tool for planning that takes a holistic view o f products and their sub-assemblies and identifies the opportunities for cost reduction and product improvement.

This paper attempts to merge these two diverse tools o f customer-orientation and financial consideration thus integrating target costing into QFD framework. This proposed approach not only enables designers to optimize product development resources towards customer satisfaction, but also facilitates decision making towards company’s satisfaction as regard to the cost committed to the product. A case-study has been discussed and issues o f implementation o f this integrated approach from the perspective of a small company by selecting a consumer product are highlighted. With this integrative approach, the best balance between enterprise satisfaction and overall customer satisfaction can be obtained, and the preferred solutions under different business criteria can be achieved.