SAMPLE COMPANY                                        Page 1 of 8
SOP # 04-1  Revision: 0                Prepared by:             _
Effective Date:                        Approved by:             _


Title:         PRODUCT DESIGN AND DEVELOPMENT

Policy:   The design phase is the most important phase in the
          life cycle of a product.  The inherent quality,
          effectiveness, safety and customer satisfaction of a
          product are established during this phase.  No matter
          how carefully a product may be manufactured or how
          perfect the quality control program, these inherent
          qualities cannot be improved except through design
          enhancement.  Therefore, it is crucial that adequate
          planning and controls be established, implemented and
          maintained during the design phase to assure that the
          quality, effectiveness, safety and customer
          satisfaction of a product are optimally enhanced prior
          to manufacturing.

          Achieving these intrinsic qualities are a direct
          function of:

             a.     Awareness of the design goal by management,
               engineering, production and quality assurance.

             b.     Correct selection and application of parts
               and materials.

             c.     Performance of normal and worst-case testing
               to evaluate and assure that the product design and
               manufacturing processes will perform as intended
               under all reasonable circumstances.

             d.     Thorough review and analysis of the product
               design.

          Further, product developments should be managed in such
          a way to assure timely development of new products in
          order to reach completion quickly and capitalize on
          market opportunities.


Purpose:  To outline the steps for the planning, development and
          review of new products.

Scope:    This statements applies to all new product developments
          and significant changes to existing products.
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Definitions:

1)   Failure Mode and Effects Analysis - Failure Mode and Effects
     Analysis (FMEA) is an evaluation technique for testing the
     design of products in which failures are assumed to occur.
     FMEA is useful for evaluating reliability, safety and
     general

     quality where, for example, the evaluator assumes that:

         -     each component fails;
         -     each subsystem or subassembly fails;
         -     the operator makes errors; and
         -     the power source is interrupted and immediately
          restarted.

     The probability of each failure actually occurring and, if
     it does, the resulting effect are analyzed.  Then, where
     needed and feasible, hazards and faulty performance are
     designed out of the device; or compensated or
     prevented/reduced by interlocks, warning signs, explicit
     instructions, alarms, etc.  Risks cannot always be removed
     from products, but they should be known and controlled to
     the extent feasible with existing technology.

     FMEA is a very powerful and cost-effective product design
     evaluation technique.  It takes very little time to "assume"
     that a component or subsystem is going to fail versus the
     actual time required to test to reach failure.

2)   Fault Tree Analysis - Fault Tree Analysis (FTA) is a
     deductive, top-down approach to failure mode analysis.
     First, a system failure or safety hazard is assumed.  Next,
     through the use of detailed logic diagrams, basic component
     failures or events are identified that could cause the
     assumed system failure or safety hazard.  Once identified,
     computational techniques are used to analyze the basic
     defects, determine failure probabilities and establish
     severity of effect.

3)   Failure Mode Effects Criticality Analysis - Failure Mode
     Effects Criticality Analysis (FMECA) is an inductive, bottom-
     up process which assumes basic defects at the component
     level and then determines the effects on higher levels of
     assembly.  Failure modes are analytically induced into each
     component and failure effects are evaluated and noted,
     including severity and probability of occurrence.  FMECA can
     be performed using either actual failure data derived from
     field failures or hypothesized failure modes derived from
     design analysis or other sources.  In addition to providing
     information about failure cause and effect, FMECA provides a
     structured method for proceeding component-by-component
     through the system to assess failure effects.



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Procedures:

1.0  New Product Initiation

1.1  All personnel in the Company are encouraged to be involved
     in product and process improvement.  To facilitate this
     process and to allow management to determine and initiate
     viable product development projects. a Request for
     Engineering Action (REA) form should be completed for all
     ideas.

     The REA form should be completed by the originator with as
     much detail as necessary to adequately describe the reasons
     for the request and proposed recommendations.  Additional
     documentation can be attached to provide increased clarity
     or further information.  The REA will then be forwarded to
     Engineering where a sequential REA # will be assigned for
     tracking purposes.

1.2  Marketing and Engineering will be responsible for informally
     evaluating an initial market viability and technical
     feasibility for the new idea based upon their experience and
     intuitive assessments.

     Marketing will proceed with ideas deemed potentially viable
     by preparing a market analysis and product brief.  The
     marketing analysis should include:

         a.    Determining the need for the product or service.
         b.    Accurately defined market demand and sector
          including determination of the grade, quantity, price
          and timing estimates for the product or service.
         c.    Determining customer requirements through contract
          review or market needs including an assessment of any
          unstated expectations or biases held by customers.

     Marketing will then communicate the customer and
     product/service requirements  by preparing a documented
     product brief.  The product brief helps translate customer
     requirements and expectations into a preliminary set of
     specifications as the basis for subsequent design work and
     analysis.  The following items can be included in the
     product brief:

         a.    performance characteristics (e.g. environmental
          and usage conditions and reliability).
         b.    aesthetic or sensory characteristics (e.g. style,
          appearance, shape, color, taste, smell).
         c.    installation configuration or fit.
         d.    packaging.
         e.    applicable standards and statutory regulations.
         f.    quality assurance/verification.

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1.3  Upon completion of the market analysis and product brief,
     executive management in conjunction with marketing and
     engineering will thoroughly evaluate the product or service
     idea for individual viability and in comparison to any other
     product or service ideas the company is contemplating.

     This process serves to selectively qualify ideas in order to
     allocate financial and personnel resources and prioritize
     projects.  This evaluation should include technical,
     financial and marketing assessments such as technical
     feasibility, investment cost, producibility, serviceability,
     profitability, payback, market trends, product life cycle,
     durability, competition, pricing, distribution, installation
     and service requirements, legality and liability.

     Management will then initiate a decision to begin
     development of the product idea.  However, the product
     development process will be monitored on a continuous basis
     in regard to the above criteria and specifically for
     technical problems or changing market conditions.  All
     projects will be required to continually pass a viability
     assessment regardless of the amount of time or investment
     incurred.


2.0  Design Planning

2.1  A Product Manager will then be assigned to oversee the
     planning and development of the product.  The Product
     Manager will form a specification and design team which will
     include representation from engineering, manufacturing and
     service.

     The function of this team will be to translate customer
     needs from the product brief into technical specifications
     for materials, products and processes.  The goal is to
     provide a product that provides customer satisfaction at an
     acceptable price that enables a satisfactory return on
     investment for the company and ensures that the product is
     producible, verifiable and controllable under the proposed
     production, installation, operating and servicing
     conditions.


3.0  Product Development

3.1  The Product Manager and the design team will then prepare a
     product development plan with specific details for each
     design and development activity or phase.  Whenever
     possible, the development plan should be divided into
     modules which can be worked on simultaneously by different
     design teams in order to accelerate the process with a
     quicker completion and market introduction date.


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     Each activity will identify responsibility (Internal or
     Outside Firm), description of the activity and the time
     frame for accomplishment.  The description of the design
     activity should provide clear and definitive technical data
     for procurement, the execution of work and verification of
     conformance of the product development to specification
     requirements.

     The time frames established for each activity should provide
     interim development checkpoints appropriate to the nature of
     the product.  The checkpoints at which design reviews or
     evaluations will take place may depend upon the product's
     application, its design complexity, the extent of innovation
     and technology being introduced, the degree of
     standardization, and similarity with proven designs.

     Upon approval of the product development plan, each team
     will be given adequate authority to take actions for
     accomplishment of their phase without repeated approval
     processes.  Product development is a sequence of decisions.
     Shortening decision-making time can dramatically speed
     product development.  Yet, each team will be responsible for
     ensuring adherence to the above quality and coordinated
     development program with adequate communication at all
     times.  Organizational and technical interfaces between
     different groups shall be maintained and the necessary
     information documented, transmitted and regularly reviewed.


3.2  During development of prototypes, the design team will
     continually review customer requirements.  In addition,
     consideration should be given to the requirements for
     safety, environmental and other regulations.  The quality
     aspects of the design should be unambiguous and adequately
     define characteristics important to quality, such as
     acceptance and rejection criteria.  Both fitness for purpose
     and safeguards against misuse should be considered.  Product
     definition may also include reliability, maintainability and
     serviceability through a reasonable life expectancy.

     Changes made to the specifications during the development
     process, that are accepted as design changes, will be
     documented and evaluated to assure that they accomplish the
     intended result and do not compromise the effectiveness or
     safety.

3.3  The design teams will be responsible for assuring that all
     parts and materials used in product designs have the
     reliability necessary to achieve their intended purposes.
     For some parts and materials, this assessment can be done in-
     house, while for others it may be necessary to contract with
     suppliers or outside test labs.  The reliability goal should
     be based on the severity of use and importance of the parts
     or materials function.  The assessment should encompass the
     selection,

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     specification, qualification and ongoing verification of
     parts and materials quality, whether fabricated in-house or
     provided by vendors.  Parts and materials quality assurance
     should include qualification of suppliers to aid in assuring
     only quality parts and materials are used.

     Parts and materials should be selected on the basis of their
     suitability for the chosen application, compatibility with
     other parts and materials and the environment, and proven
     reliability.  Conservative choices in selection of parts and
     materials are characteristic of reliable products.  Standard
     proven parts and materials should be used as much as
     possible in lieu of unproven parts and materials.

     A preferred parts and materials list should be established
     as a bill of materials during the preliminary design stage
     and refined as the design progresses.  This list should
     include approved suppliers for the parts and materials.


4.0  Product Testing and Qualification

4.1  Methods should be specified for testing and measurement and
     the acceptance criteria applied to evaluate the product
     design during both the development and production phases.
     Parameters should include the following:

        a.     Performance target values, tolerances and
          attribute features.
        b.     Acceptance and rejection criteria.
        c.     Test and measurement methods, equipment, bias and
          precision requirements.

4.2  Periodic evaluation of the design should be performed at
     significant stages.  Such evaluation can take the form of
     analytical methods, such as FMEA, FTA or FMECA.  Evaluation
     should include inspection and/or testing of prototype models
     and/or actual production samples.

     The amount and degree of testing should be related to the
     risks identified in the design planning phase.  The tests
     should include the following activities:

         a.    Evaluation of performance, durability, safety,
          reliability and maintainability under expected storage
          and operational conditions.
         b.    Inspections to verify that all design features are
          as intended and that all authorized design changes have
          been accomplished and recorded.
         c.    Validation of computer systems and software.



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     The results of all tests and evaluations should be
     documented regularly throughout the qualification test
     cycle.  Review of test results should include defect and
     failure analysis.

5.0  Design Review and Verification

5.1  At the completion of each phase of design development, a
     formal, documented, systematic and critical review of the
     design results should be performed.

     Reviews should be objective, unbiased examinations by
     appropriately trained personnel which include individuals
     other than those responsible for the design.  For example,
     design review should be conducted by representatives of
     Manufacturing, Quality Assurance, Engineering, Marketing,
     Service and Purchasing as well as the actual design team.
     The design review should identify and anticipate problem
     areas and inadequacies, and initiate corrective actions to
     ensure that the final design and supporting data meet
     customer requirements.

     A design review checklist should be constructed as
     appropriate for the product design with the review
     consisting of an evaluation of the design to assure that
     each checklist item was adequately addressed.  The following
     are items that could be included in a checklist:

         -     Physical characteristics, constraints and
          aesthetic specifications;
         -     Safety needs of the user, environmental
          compatibility, need for failsafe characteristics;
         -     Considerations of unintended uses and misuses;
         -     Compliance with regulatory requirements and
          national and international standards;
         -     Labeling, including warnings, identification and
          traceability, operating and maintenance instructions;
         -     Packaging, handling, shelf-life, storage and
          stability requirements;
         -     Product installability, reliability,
          serviceability and maintainability requirements;
         -     Producibility of the design, assembly requirements
          including any special processes such as mechanization,
          automation and installation of components;
         -     Selection of materials, components and sub-
          assemblies, including approved suppliers and
          availability;
         -     Review and use of standard parts;
         -     Capability to inspect and test the product,
          including special inspection and test requirements;
         -     Failure Mode Effects Analysis; and
         -     Acceptance criteria and permissible maximum and
          minimum tolerances.
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5.2  Review results should be well documented in report form and
     signed by designated individuals as complete and accurate.
     All changes made as a result of review findings should be
     documented.  Reports should include conclusions and
     recommended follow-up and should be disseminated in a timely
     manner to appropriate organizational functions, including
     management.