27. Production Volumes

One of the most difficult issues to address at the front end of a product development is the issue of production volumes. Production volumes are the key determining factor of the processes and capital equipment required to achieve optimum economy in the realisation of a product. They also dictate the economies of scale that can be achieved in raw materials or component purchasing.

Manufacturing Facility Scaling

Production volumes are one particular area where prophecy is invariably self fulfilling. If the production volume forecasts are low, the manufacturing facility and process will only be scaled to a level to achieve the forecast. If the production volume forecasts are high, the manufacturing facility and process will be scaled to a level to achieve the output objectives.

All too often the inexperienced will err on the conservative side when specifying production volumes. The result is that the production facilities may never fulfil better than expected sales opportunities, or may never meet cost expectations required to compete on price with other similar products. Of course there is the converse error of judgement in that over optimistic forecasts may mean unwarranted investments in capital equipment.

Influence on Development Process

Similarly the production volumes will have a major influence on the development process adopted. Low volumes will tend to influence the developers towards cost effective product development practices rather than striving for a cost effective product in manufacturing terms.