Knowledge of the product life cycle is important for cost management. We can easily see the impact of the four stages on marketing and the growth and decline of sales. Less obvious is the impact on the cost side. Manufacturing must be aware of the impact of newness on costs. Any time a new product is introduced, there are learning effects. In other words, as a company makes more of the product, the employees become better at making it. Purchasing locates and becomes familiar with suppliers of the needed materials. Manufacturing learns to set up more quickly and efficiently the equipment for a new batch. The industrial engineers are able to “work the bugs out” of the process. The whole production process smoothes out and becomes faster and more efficient-and less expensive. However, that is not the whole story. As we can see in Exhibit 18.6, the maturity phase is marked by extensive product differentiation as line extensions proliferate.