Design

Need --> Concept --> Specification Need
Almost every product starts with the awareness of a need, then an idea is conceived to address that need. With a little more thought, and a few sketches the basic concept is born. There is a perception that perhaps others may also share this need, and the inventor sees an opportunity to bring a product to market.

Unfortunately there a a lot of time consuming, expensive steps in the above process!
At this stage in the process it is important to identify what the need actually is, and to be able to describe exactly what problem your concept solves, the more detail can be provided at this point, the less time and money will be wasted on sidetracks. All too often the inventor is carried along with the novelty of their concept and loses touch with the original problem.

An example of a needs statement might be:

I need to be able to move heavy objects.

This is a bit vague, better if we can identify the need (and perhaps niche market) in detail.

I need to be able to move objects of 100 to 500kg , of volume less than 1m^3

I need to move them across rugged terrain, of distances of 1km

A speed of 10km/hr would be adequate

and I don't have electrical power nearby

Concept
Suddenly , in a flash of inspiration, you realise "what I need is an anti-gravity machine" and this becomes your concept, you race down to the patent office only to be disheartened to learn that concepts can't be patented, only devices (that embody your concept) that provide a solution to the problem. These devices must stand the tests of inventiveness, novelty, and utility. So we need to flesh out the concept, and the method by which it works. That last phrase is very important : a method is required, and the device must work!.
The concept is usually drescribed by means of a few hand sketches, suitably marked up with arrows and explanations; and lists of features.

Perhaps we should be doing a market survey at this point? Why bother? No-one else seems to! "Build it, they will come" is the all too familiar catch cry.

So armed with several heavily scrawled over envelopes, laden with illegible sketches and diagrams, our would be inventor stumbles across his first hurdle: He has to get someone to build his device, and so he approaches his local engineer.

The first thing he requires is a specification.

Specification
Perhaps the first specification went like this:

"Noah , make yourself a boat, make rooms in it , and cover with tar inside and out.Make it 133metres long, 22metres wide, and 13metres tall, Make a roof for the boat, and leave a space of 44 cm between the roof and walls. Build it with three decks and a door in the side. Take into the boat a male and female of of every kind of bird and animal, and take along all kinds of food, to keep them alive for forty days."

The important thing here, as with all specifications, is to leave nothing nothing to chance, never assume the person reading it has the same understanding as yourself. Punctuation can even be important, if you want ten 3½" floppys , then ensure you don't inadvertently write 103 ½" disks.
Even sizes can be ambiguous;

½" tube is sized on exact outside diameter (and the ID may vary, eg 5/16")
½" hose is sized on exact inside diameter (and OD may vary, eg 5/8")
½" pipe is sized on an exact OD of 3/4", that gives an approximate bore of 1/2"
Electrical wire is spec'ed on the copper wire diameter (or area) and not the diameter of the outer insulation.

The trend is to use tabular format , particularly for numeric data, an example might be:
ARK project specification rev 1.0

Material	Clear Hardwood F6 or better
Size	133m L x 22m W x 13m H
Roof	Required , side clearance >0.44m
Decks	3
Access	1 side door	Downward hinging preferred
Waterproofing	Tar inside and out per ANSI0001
Load capacity	2 of each species	refer to species schedule 1
Service life	47days
Accommodation	10 families	Upper deck preferred

As you can see this is a first pass, and there are some points to be observed:

"jargon" words such as "clear" are used, this does not mean "transparent" but "clear of knots"
a standardised rating is used "F6" for the timber strength
we have omitted a few things, e.g. the size of the door, we need to accomodate elephants and giraffes, and what about toilet facilities?, propulsion system?, steering system?
a published standard is quoted "ANSI1234" , it is important to ensure the standard is relevant, e.g. this standard may have only described the color of the tar!
the load capacity is in end user terms, an but engineer really needs to know the tonnage!
also omitted is any statutory compliance that is required (e.g. EMC)

A good specification will go through several iterations/negotiations/compromises, until the engineer is certain he has something that can be built, and the client has something that will do the job.

[ put in more on elec engineering , and sample spec worksheet!]