The objective of this work was the development of a computer aided concurrent engineering system (CACE) for manufacturing simulation with particular application to hot isostatic pressing (HIP). The physical and mechanical phenomena connected with the hot isostatic pressing of powder metallurgical materials are analysed. During the HIP process the initial porosity in the powder material is eliminated due to the simultaneous application of heat and pressure, and the powder is compacted into a fully dense material. Due to effects of container rigidity and nonuniform distribution of temperature and relative density during the HIP process, the final shape and size of a component often differ from the required shape and size. For the successful application of HIP technology in industry, it is important to obtain HIP products with near net shape (NNS) geometry in order to reduce the costs of extra machining, especially in the case of difficult to machine materials. It is difficult for designers to predict the size and shape of a container in order to achieve the required geometry of a component. The work presented here is concerned with the problem of prediction the shape of the container for the HIP process. The complex thermal and deformation histories which occur in this process have been simulated by means of implicit, finite element codes. An efficient solution of this problem is necessary to make large and complex analyses feasible. Two algorithms for the accurate and effective integration of pressure sensitive constitutive equations are presented in this study. A macromechanical approach using constitutive equations was able to correctly represent the densification behaviour of a powder material during the whole HIP cycle, provided that these equations are properly fitted to experimental data. An experimental program was carried out to identify material parameters for a gas atomized martensitic stainless steel powder, denoted APM 2390. A nonlinear least squares method was applied to the problem to determine the parameters of the constitutive law. In the CACE system, data from a coordinate measuring machine (CMM) was used to verify the accuracy of the simulated geometry in comparison with the final geometry of the HIPed products. The accurate simulation of HIP process allows optimization of the HIP process parameters which is essential for the cost effective manufacture of parts with complex geometry.