With increased pressures coming from global competition and requirements for greater innovation in product development, designers are hard pressed to deliver designs of higher quality and variety using a repertoire of technological options from different disciplines. This interdisciplinary product development approach has not only removed many of the traditional constraints to design but has now given designers a much wider freedom of choice as to the best solution to a design problem. The focus of this paper is a knowledge-based design environment called Schemebuilder, which is a comprehensive and integrated suite of software tools aimed at supporting the designer in the rapid development of product design models in the conceptual, through embodiment stages of design. Illustrated is the use of the software tools in the qualitative generation of alternative schemes, by application of stored working and decomposition principles in the development of a function-means tree-like information structure. With mechatronic product development as the main theme, this paper describes a closely integrated methodology that incorporates a bond graph approach to continuous-time energetic systems and high-level Petri nets for the rigorous description of discrete-time information systems. Additionally, a technique is suggested for the decomposition of free format statements of need into the rigorously defined design context and required functions, which form the starting point of the function-means development process.