design for

market systems

Integrating social, economic, and physical sciences to engineer product success.

roduct success depends on successful planning of both the big picture and the details. Mechanical engineers tend to focus on the details—making products work as intended physically—and they leave it to managers and government to interpret trends and set targets. But obtaining desired mechanical properties is not the end goal. The net impact of design choices on the end user, the firm, and society depends on how these choices play out in the market. In part due to our detailed focus, engineers today play a relatively small role in big-picture decision-making in the firm and in government. Yet decisions that fail to adequately consider the implications of engineering tradeoffs on big-picture outcomes result in unintended consequences—and big-picture decisions affect engineering design work directly. We need to better understand the implications of engi2 mechanical engineering | November 2008

neering design in the big picture, and we need to train more engineers for strategic decision-making to achieve broad social, economic, and environmental objectives. We need a science that can support decisions at the interface of engineering and market systems. Mechanical engineers learn to apply principles of the physical sciences so they can predict product behavior and design products that behave as intended physically. But when it comes to understanding what design choices will mean in the marketplace, suddenly science vanishes: Designers are taught to weigh the relative importance of customer needs and benchmark the product’s performance—hoping a design that performs on these criteria will perform in the market. But we need not abandon science where engineering

Science in DeSign

systems meet market systems: Using social and economic sciences to predict market behavior can enable us to design products that behave as intended—not just physically, but also in the market. Despite the ubiquitous customer focus of today’s design processes, there remains a “throw it over the wall” mentality in analysis. Engineering designers employ complex models for engineering analysis, but they typically do not model the role that market forces play in driving engineering goals or determining outcomes. The fields of marketing and management science have worked for some time to construct tools for measuring and predicting market behavior to guide business decisions. However, most studies in these fields examine products like yogurt or ketchup—products where there are few relevant engineering tradeoffs and there exist large data sets of purchase histories from customers identified by their scanned supermarket rewards cards (e.g., they know if you usually buy Coke but decided to buy Pepsi when it was on sale). Products like these can often be launched and managed with scant knowledge of engineering details. But when more complex products are involved, engineering analysis is critical to making good business decisions. It is here that design should be supported by market analysis and market planning should be informed by design tradeoffs. The market is a system, and like engineering systems we can use analysis to break it down and study it scientifically—so long as we maintain an appropriate scope and account for uncertainty. Mechanical engineering researchers such as Shapour Azarm at the University of Maryland, Wei Chen at Northwestern University, Kemper Lewis of the State University of New York at Buffalo, Panos Papalambros at the University of Michigan, Michael J. Scott at the University of Illinois at Chicago, and I, as well as collaborators outside of mechanical engineering, are working to study engineering design in the context of market systems. By integrating quantitative engineering and economic models, the ability to understand, predict, and account for the market implications of design decisions is beginning to come into