If a firm sells only one product, when that product reaches the end of its life cycle, the firm, too, will die. To stay in business, the firm must at least find ways to extend or refine the want-satisfying capability of its product. Only a few of the many ideas for new products, refinements, and extensions ever reach the production stage. For those ideas that do, the next step in the process of operations management is planning for production. This step consists of design planning, facilities planning and site selection, and operational planning.
Design planning is the development of a plan for converting a product idea into an actual product.
The major decisions involved in design planning are described as follows. A product line is a group of similar products that differ only in relatively minor characteristics. Each distinct product within the product line must be designed. Product design is the process of creating a set of specifications from which the product can be produced. Capacity is the amount of product or services that an organization can produce in a given period of time.