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CBD using a building block approach to the design and manufacture of products and services. A classic metaphor is the children's building system called Legotm.
The modern manufacturing example is the purchase of a Personal Computer from a company like Dell. Users can design their PC from the ground up or start with a pre-configured system that they then modify by adding, removing and substituting components.
A service example is a credit card where a user can select various options such as repayment date, minimum repayment, interest rates, travel insurance, damage and loss of goods insurance, affiliated discount schemes, charitable donations, as well as the physical appearance of the card itself. Of course, today many good have both physical and intangible elements.
CBD implies that New Product Development concentrates on the design and pricing of the components and the rules for deciding which components can co-exist. Another layer of pricing rules may apply at the assembly level taking into account manufacturing and distribution costs and customer life time value. For many goods, interface properties are important. For example, a check bank account may automatically sweep surplus assets into a higher interest saving account.
Because users have similarities in their requirements, then pre-configure sets of components may be available. These are also known as patterns.
The design of the finished product or service is usually a co-operative affair with the customer. This can take place, for example, using the internet, over the telephone or with a sales representative in the retail outlet. Methods employed depend on the experience, knowledge, skills and inclination of the customer, and the complexity of the product or service. For service goods, the manufacturing often takes place at the same time as design. Some design systems allow customers or representatives to simulate the goods in use, so that the customers can refine the goods before they commit themselves to a purchase.
Once a product or service has been acquired the principle can be applied throughout the life of the product or service. Components can be added, removed or substituted to meet the ever changing needs of the customer. The Smart car, now launched in Europe, is an example.
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