Value Loops

Value Loops

2026 Jun 08designengineeringmanufacturingsystem development

When thinking about design and manufacturing systems, I've found feedback loops to be clarifying.<br>Starting out, everyone seems to know that waterfall development is bad and that something like a V model is better, but beyond PowerPoint both leave a lot out.<br>In this post I'll share how they are constructed and how I use them to communicate development tasks.

Feedback loops #

Take an input, perform some process on it, and you get an output:

An open-loop system

Now if your process can use the output as another input to the process, it looks like this:

A closed-loop system

This is a closed loop system, whereas the first is an open loop.<br>Control engineering is about how do we model processes, incorporate feedback, make predictions, and achieve goals.

Now let's apply this to manufacturing.

Manufacturing loops #

As above, an open-loop process has no feedback.<br>For an organization developing a product, this looks like:

Developing a product

At the start there is an implicit, unmet need in the market, this is recognized by the organization which forms an idea to satisfy the need.<br>Someone has an idea that is developed until they have a unit to manufacture and sell.<br>Now as anyone will tell you, this is overly simplified.

We can label many more steps in the product journey (click to enlarge):

Developing a product

And, assuming sales, we can draw a first loop where revenue from sales help to produce the product:

Sales!

But, it's foolish to manufacture your first version of the idea, maybe prototyping will improve it?

Prototyping feedback loop

We can continue adding loops until we get a reasonably-encompassing diagram of the different ways a product can be developed:

Development feedback loops

There are many different stages and many different ways that the output from one development task can feed later tasks and improve earlier ones.<br>In drawing these my goal is to emphasize how iterative developments can be, both end-to-end and between stages/teams.<br>Organizations differ widely in what feedback loops they employ, how aware they are of them, and how formal their process is, with accompanying differences in precision of the feedback and resources consumed.

When Elon says "the factory is the product", the relationships in this graph are what he means, all of the people, technologies, and processes that turn ideas into successful products.<br>The goal of any manufacturing company is (should be) to make these loops go faster, to increase the throughput of the product development process and get more things into the real world.<br>Fast and known development cycles enable quick responses to changing market dynamics and the best utilization of resources.

Many insights fall out of this perspective.<br>A few can be seen in our design tools but many more are not yet public; in short, most design software is not designed with this perspective in mind.

If you find this interesting I'd love to talk with you or please comment on X or LinkedIn.

— Ben Conrad

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