Very large economic and political pressures for manufacturing companies (such as in the G8 countries) exist to which they must respond. The aggregated pressures and responses are making a sea-change across the industry. The pressures include high-cost labor pools, and costly raw materials (e.g. steel and petroleum). Responses also cover internal consolidation, outsourcing towards global product development, and assembly flexibility. The companies must alter their operations to fit these pressures and responses.

To understand these trends, studies have been conducted on manufacturing product development that provide a snapshot of the current state of the industry and a 5-year forecast. The studies review such varied areas as business philosophy, product design tools, communication methods and engineering efficiency. One clear trend identified in this study is an increase in outsourcing to global suppliers, broadly classified as Global Product Development (GPD).

GPD can be defined as the maximization of financial and operational productivity of the product development process by distributing product development tasks across different regions of the globe to efficiently match value-addition and cost. Part of product development includes marketing activities to recognize and record the needs of the customer.

Along with this it includes engineering activities that conceptualize, design, analyze and refine new product ideas; to activities that plan and document manufacturing, operation, and maintenance processes; to sustaining activities that make ongoing product changes and refinements.

The studies done show that companies which implement GPD strategies gain substantial financial and operational benefits. Savings around 0.5% of company revenue and 10% of the product development budget can accrue. Other operational enhancements including 24×7 engineering and the generation of specialized skill capacity by reinvesting cost savings are feasible.

Several OEM’s have taken up this GPD model leading to restructured global design and operations for optimal utilization of trans-world resources, speed up product development thereby reducing expenses. Proceeding with the implementation of a GPD strategy requires the analysis of product development activities. A company must look at segregation of the high value-addition and the low value-addition activities and then determine the degree of portability of these activities.

The global product development service model is increasingly utilized in the current manufacturing world to maximize efficiencies and minimize costs.

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