Incorporating Environmental, Quality and Economic Considerations Into Early Product Development Stage

Abstract

Environmental impact is becoming an important consideration in product development, such as recycling in electronics industry and air pollution in automobile industry, besides product quality and economic growth. Incorporating the environmental impact consideration into business practice as early as possible can lead to direct impact on both strategic planning in a firm and the final product, which will benefit the firm and its customers. However, many different types of business activities and levels of decision-making involved at the early stage make the simultaneous consideration of environmental impact, quality and cost hard to render. An investigation on the existing research has shown that the activity-based cost/environmental model, in a uniform representation (activity), is useful in relating business activities to the performance measures in terms of cost and environment impact resulting from these activities. In this work, the authors argue about the needs and issues on explicitly integrating quality concern into the existing activity-based cost/environmental model. The expanded model, i.e., Three-View Activity-Based Model, is intended to help construct a clear road map to represent “what is going on?” and facilitate the measure of “how well are we doing?” in a business firm with product development involved. Product quality is treated as a driver as environment and cost for the activities, which enables quantitative performance assessment of the product quality related activities. As a result of introducing the quality driver, the need to differentiate the activities directly related to product development from other activities is identified. This has led to a study on the classification of the activities and their relationship to environmental impact, product quality, and cost objectives along a product development process with life cycle considerations. The three-view activity-based model may make it possible to evaluate the effectiveness of activities against these objectives at early product development stage, and therefore, recommend changes for reshaping a firm’s strategic planning and improving current practice. Since our investigation is still at its preliminary stage, in this paper, we will present our initial results, and address research issues for the future work.