People have been designing objects and processes for thousands of years. From a simple wheel to complex computer systems, design has been a dynamic factor in personal and organizational success throughout history. With early design processes, companies considered technology and markets separately. Often, engineering and marketing departments worked independently, with different and sometimes conflicting goals.

One example of the traditional design method is the railway engineers working in the 1800s, who apparently disregarded the influence of track locations upon the prospective costs and revenues of their railways. Arthur M. Wellington, a pioneer in the field of engineering economics, published "The Economic Theory of Railway Location," one of the first books on engineering economics, in 1877. In it, he addressed his disgust with the design process, stating that "There is no field of professional labor in which a limited amount of modest incompetence at $150 per month can set so many picks, shovels, and locomotives at work to no purpose whatsoever."

This serious condemnation indicates that the planners didn't really plan - they didn't plan so that operating costs would be minimized and revenues maximized. Such concern finally led Wellington to state a classic definition of engineering as: "The art of doing well for one dollar what any bungler can do for two."

In today's competitive world, companies can no longer afford such an ineffective approach. They need innovative product-design processes to give them a competitive advantage in the marketplace. In the modern design process, planning is key, and much of the work takes place early in the process. Note that production does not occur until the very end of a process that involves preliminary, or conceptual, design, and several iterations of optimization (analytical design).

Three measurements of success of the design process are product cost, quality and time to market. This module, the second in the series on Engineering Economics, will focus on the cost aspects of good design, specifically during the analytical design process.

NOTE: Portions of this module's material were taken from Engineering Economics: Principles and Concepts, a module developed at The Ohio State University under the NSF sponsored Gateway Coalition (grant EEC-9109794). Contributing members include Gary Kinzel, Project Supervisor and Amita Danak, Primary Author.

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