The end of life is important as of 2005/2006/2007 because of the various international and domestic laws which mandate that a producer pay for the recycling⁴ efforts of, and reduction of certain hazardous⁵ materials in, selected electrical/electronic products. Be sure to include technology and manufacturability risk assessment and cost reduction milestones (see "Cost Reduction - It's More Than Just Parts and Labor", by R. Haney). It is essential that this determination be done carefully and with 'feet-on-the-ground honesty, garnering as much advice from experienced people as possible. Otherwise the subsequent process, although still quite useful, may not optimally mediate the development funds and effort.

The next step is to relate the various Cost Categories to the associated Development Functions. These relationships will determine which development functions are the most important to the project and which are least important. Emphasis can then be given to these functions in a rational and quantitative way, allowing 'guessing' and 'gut feel' to be quantified.

Here's How It Works

The following two examples illustrate the efficacy of this method for partitioning development funds within a project development project.

Example 1: A marketing company needs a promotional product (a very small, very low cost calculator) which is intended to be mailed by a brand name long-distance phone company to potential phone customers across the nation. This item will be produced in very large quantities (several million per month over a year) and must have extremely low production costs, as it's intended to be a throwaway souvenir.

NRE - Simple technology; available from offshore vendors and can be easily amortized over expected new business; there are no technology or manufacturing risks - Importance is low.

NPD - Planning & logistics of handling large volumes is critical - Importance is high.

NRQ - The material must not contain hazardous materials so as to minimally effect the environment and waste when discarded - importance is high (see RoHS Directive). A recycling plan needs to be established too. Importance is high.

RCM - Handled by commodity vendor - Importance is low. (If this were handled by in-house production, then importance would be high)

RPC - None required - Importance is low.

RMC - None required - Importance is low.

PRM - None required - Importance is low.

From these considerations we see that the greatest emphasis (and placement of funding) should take place in the Non-Recurring Process Design (NPD), Non-recurring Qualification (NRQ) and Non-Recurring Promotion Costs stages. It will take good planning to handle the timing of the ordering, private labeling, packing, shipping and validation of legal disposal of the calculator. There is no development, marketing or service operations required. Profit is best served by buying a product instead of developing a custom product.