1. INTRODUCTION
In a global, intense, and dynamic competitive environment, the
development of new products and processes has become a focal
point of attention for many companies. Shrinking product life
cycles, increasing international competition, rapidly changing
technologies, and customers demanding high variety of options are some
of the forces that drive new development processes (Wheelwright & Clark, 1992; Pine, 1993; McGrath,
1995; Ulrich, 1995). To increase their
level of competitiveness, many companies have switched their focus from
single products to product families to increase the potential for
reusing elements from product to product. A growing body of literature
advocates the building of platform-based product families to increase
efficiency and flexibility in new product development and in order
processing (Meyer & Utterback, 1993;
Sanderson & Uzumeri, 1995; Meyer & Lehnerd, 1997; Sawhney, 1998; Krishnan &
Gupta, 2001).
We based our research on the platform concept according to Robertson
and Ulrich (1998), who define a
platform as the collection of assets that are shared by a set
of products (i.e., a product family). Criteria for platform elements
are their high commonality potential, while differentiation needs have
to be served by nonplatform elements. This is necessary to reach a high
degree of individualization with robust and standardized product
architecture elements.
The concept of building product families based on platforms has been
widely accepted in literature as an option to create variety
economically. The reasons (or expected benefits) of the concept are
mainly greater flexibility in product design, efficiency in product
development and manufacturing, and effectiveness in market positioning.
The application of the platform principles leads to different platform
types according to the kind of assets that can be used as a common
basis. Sawhney (1998), for example,
introduces several platform dimensions (product, process, customer,
brand, global). Literature also mentions the substantial risks and
trade-offs that have to be made in developing and managing platform
based product families (Sanderson & Uzumeri,
1995; Sanchez & Mahoney, 1996;
Meyer & Lehnerd, 1997; Meyer et al., 1997).
Notwithstanding the growing body of literature concerning the
platform concept and its application in practice, there is gap when it
comes to the application of the platform concept for complex products
and systems (CoPS). CoPS have been established as a distinct area of
innovation research for products and systems, where a complete
decoupling of subsystems is rarely feasible, and the variety of
subsystem combinations can cause high levels of uncertainty and risk in
system design, production, and integration (Hobday,
1998; Hobday et al., 2000). The
architecture of complex systems is characterized by multiple levels of
hierarchy (Simon, 1969) and a wide range of
architectural choices in system specification. As a result, CoPS are
engineered to order (ETO), which causes project-specific system design
and engineering efforts and leads to high resource expenditures, time
consumption, and project risk. The subsystem interactions of CoPS
complicate the identification and realization of reuse potential and
system complexity reduction (Hobday,
1998).
As the decisive characteristics of CoPS are their hierarchic
structure and their architectural choices, a focal point of our
research is on product architecture issues. The fact that product
architecture has an essential influence on system complexity and on the
design and flexibility of a product family has been pointed out by many
authors (Henderson & Clark, 1990; Sanchez, 1995; Ulrich,
1995; Yu et al., 1998; Jiao & Tseng, 2000; Krishnan
& Ulrich, 2001). We use the term product
architecture in the definition proposed by Henderson and Clark
(1990), who describe it as the way components
are integrated and linked together to form a coherent whole (i.e., a
system). This definition fits the emphasis of CoPS on systems design,
project management, systems engineering and integration, coupled with a
high degree of customization (Hobday, 1998).
The distinction between the product as a system and the product as a
set of components, and the conclusion that successful product
development requires two types of knowledge (component knowledge,
architectural knowledge) reflects the specific characteristics of
CoPS.
The finding that companies often limit their solution space for
platform potential to a low hierarchical level of the product
architecture (i.e., shared components/modules), resulting in
physical product platforms, supports our assumption that
unused potential in the development and management of platform-based
product families exists (Halman et al.,
2003). This leads to the question of whether the platform
concept can lower overall system complexity through the use of
commonality on a hierarchically higher level of the product
architecture (i.e., on the level of subsystem arrangement or layout).
The search for platform potential in this new area is a necessary
completion to our knowledge about the platform concept.
The product architectures of CoPS often combine considerable freedom
in subsystem arrangement (i.e., in product layout) with incomplete
decoupling of subsystems. As a result, every system requires high,
project-specific system integration efforts (i.e., an ETO approach). If
system complexity can be efficiently reduced, competitive advantages
can be created.
In this paper we introduce a new platform type, the layout
platform. We define the system layout as the arrangement of its
subsystems. Designing a product family based on a layout platform means
defining a priori (and, therefore, standardizing) the
arrangement of subsystems that the product consists of. This
standardized arrangement of subsystems is a deliberate restriction of
architectural choices and serves as a basis for segment-specific
(derivative) product development.
Although the notion that the platform concept comprises tangible and
intangible elements shared by a set of products is not new in
literature (see, e.g., the platform definition proposed by Robertson & Ulrich, 1998), many case studies
focus on products with relatively low levels of complexity. We argue
that the deliberate restriction of architectural choices (i.e., through
a layout platform) is a powerful means to reducing engineering
complexity and risk.
This paper analyzes the use of the platform concept in practice. It
investigates how and where platform potential can be identified
regarding CoPS, and what trade-offs have to be considered. It looks at
how different companies use commonality across products within a
product family, and where further (unused) potential can be found. With
a focus on product architecture, the paper looks at different
hierarchic layers to identify new platform potential. A framework is
used to compare and to generalize the findings, and finally to draw
conclusions for the design and management of platform based product
families.
3. CASE STUDIES
In the following, the three companies contributing to the case
studies are characterized. The first company, a provider of postprint
management systems (case PPM), is a global player in a specialized
market with 850 employees. The second company is one of the
world's largest providers of railway vehicles (electrolocomotives,
case ELO), and employs 20,000 people with a sales volume of 3.5 billion
EUR. The third company produces wires and cables for energy and signal
transmission (case EST) with 1000 employees and sales of 150 million
EUR.
3.1. Initial situation
The three cases represent different markets, products, and
applications. However, common to all three companies is a market
structure with different market segments. The analysis also found a
similar structure of product architecture layers across all cases,
where existing platform concepts were in use to increase commonality on
a hierarchically low (component or assembly) level. These product
platforms have no substantial limiting effect on system complexity, as
they do not restrict subsystem interactions, and consequently, cannot
prevent high system integration efforts. This complexity prohibits
entering lower market segments.
Table 1 compares and summarizes the
layers of the product architecture found in the three cases.
Layers of the product architecture
3.1.1. Case PPM
PPM comprises the transport and storage of rotary press output, the
inserting of supplements, and the packaging, addressing, and
distribution of finished products (i.e., newspapers with inserts). The
company was initially focused on the upper end market with high demands
on system performance. The inserting system receives the print output
from the rotary press or a storage system on a conveyor belt, completes
them with inserts (e.g., ads), and passes them on for
addressing and packaging. The capability for system expansion through
the connection of several inserting lines is a central quality of the
product family. Existing systems can be adapted to changing functional
or capacity needs. As a means of investment protection for customers
this results in a high customer tie. The systems are specified to
individual operation concepts with high engineering efforts caused by
special customer demands and high efforts to integrate external systems
or components.
The market for PPM is dominated by few rivals. It can be divided into
a segment for highly individualized solutions, a segment with a
predefined (configurable) product range, and a segment for standardized
solutions in a lower level. The strategic goal of the company is to
build a strong competitive position in the lower price (but
high-volume) market segment. Many efforts to enter the lower price
segment with the existing systems approach proved unsuccessful because
of difficulties in realizing concept or design reuse potential. The
lack of a common platform for different market applications led to high
individual engineering efforts and intensified the danger of getting
pushed into an increasingly narrow market niche.
The systems are built of different subsystems or assemblies (with
functional options), which are arranged in a specific layout and
integrated in the surrounding systems (rotary press, addressing, and
packaging). The layers of the product architecture consist of basic
subsystems (assemblies based on product platforms) with standard
functionality, variable features, and components (add-ons), the layout
(arrangement and connection of the assemblies), and the system
integration. Each layer with its specific variety leads to increased
complexity in controls and operations design and cost of commissioning
and testing.
The analysis of the product architecture showed high levels of
variety with comparatively low effects on segment-specific
differentiation resulting in high process complexity in all market
segments. Although the modular product architecture on the assembly
level resulted in a high degree of component reuse, reuse on
the system level could not be consistently realized from project to
project. Especially the customer-specific design of the system layout
results in high levels of detail engineering, and increases project
costs and risks.
3.1.2. Case ELO
Locomotives are traditionally specified and built to order, whereas
the lack of a common basis inhibits an effective reuse of components
and modules. The high-order specific efforts result in a poor cost
position, in particular in the case of small lot sizes. To be able to
keep pace with price evolution, a high degree of reuse and a
substantial reduction of engineering efforts is necessary. Because of
these general conditions it is getting increasingly difficult on the
one hand to speed up the order processing with a differentiated order,
and on the other hand, to fulfill the cost targets to maintain the
market share. Reaching the profitability targets with medium and small
lot sizes can only be achieved through the reduction of engineering and
order processing efforts and through the reuse of existing solution
elements.
The market for railway vehicles is exposed to strong structural
changes. Through the privatization of formerly state-supported railroad
companies and the ceasing of subsidies the price sensitivity of the
customers increased substantially. The entire market is characterized
by excess capacities, which lead to decreasing unit prices. The market
price for electric locomotives up to 6.4 MW has dropped by around
30–40% from 1990 to 1997. Simultaneously, the purchase behavior
changes and lot sizes decrease dramatically.
The product architecture of electric locomotives consists of
different layers: standardized system assemblies (building blocks,
i.e., product platforms) with basic functionality; customer-specific
system features and assemblies; the arrangement of the assemblies in
the engine room; and the integration in the overall system
(locomotive).
The virtually unrestricted variety on the assembly level leads to
high integration complexity and risk, and consequently, to a critical
cost position for realizing small to medium lot sizes (too high
engineering costs per locomotive). The building of assemblies based on
physical platform components has some effects of scale on the assembly
level but cannot substantially lower complexity in system
integration.
3.1.3. Case EST
The company providing wires and cables for EST offers its products in
three vertical market segments: standard products, which are listed in
the product catalog; configurable products from standard components;
and technically demanding special products that have to be engineered
individually.
The company positions itself through the development competence of
solutions for specific customer needs, for example, in automobile
manufacturing. Although in this segment a high level of development
effort for specific products is accepted and paid for by the customers,
the ability for rapid and low-cost reaction (flexibility) in a lower
market segment (mass customizing) becomes increasingly important. In a
market environment characterized by time and cost pressure, high
response times for offer creation and order processing represent a
competitive disadvantage. Customers with needs very near the catalog
product range hardly understand these delays and are not willing to pay
extensive development and testing activities.
Cables are built of single wires that are twisted to a conductor and
then coated (extruded) with insulating material of specified thickness
and color. Cables consist of a combination of leads that are coated
again. The elements (layers) of the product architecture are:
predefined lead components (wires, coating materials), variable
subsystem features (wall-thickness and color), the lead construction,
and the cable construction. These layers also reflect the production
process.
The low degree of interaction between the components leads to almost
unlimited variety, because few (technical) restrictions exist. As a
result, orders for customized solutions have to be checked for
feasibility, and their processing becomes extremely complex and slow.
This is accentuated by the need for producing and testing prototypes in
many cases, because the almost unrestricted technical variety prevents
the precise deduction of product characteristics.
In the initial situation, the different market segments could not be
provided with segment-specific solutions, and as a result, the cost
position in the basic market was too high.
3.2. New product family concept
Starting from a situation where the use of commonality is limited to
a low hierarchical level in the product architecture, the question
arises whether new platform potential can be found in other layers of
the product architecture. The traditional platform approach focuses on
the component level, and mainly affects direct material and labor cost
through improved economies of scale. These effects are not always
sufficient to support a product range for multiple market segments, as
complexity along the value chain is not substantially reduced by this
platform approach.
The typical characteristics of CoPS are their hierarchic product
architecture and the freedom in architectural choices that lead to
considerable complexity and risk in design, engineering, and
manufacturing. In the case study projects, the search for new platform
potential was thus extended to other layers of the product
architecture. As a first step, these layers were identified and then
they were separately characterized by their differentiation needs and
commonality potential. The overall goal was to realize a
segment-specific product range based on a common basis, and supporting
distinct processes and process cost. The basic idea of using the
platform concept was to search for commonality potential across all
market segments with the goal to increase the reusability of concepts
especially in the low-end market. The focus in all cases was on using a
standardized system layout (arrangement of components or assemblies) as
a conceptual platform.
In all three cases it was possible to identify platform potential on
a hierarchically higher level of the product architecture. Commonality
on a low level (components, assemblies) was already used by all
companies. The decisive difference between traditional product
platforms and the (new) layout platforms is the degree of influence
they have on system and process complexity.
The definition of the different layers of the product architecture
resulted in much clearer structured product ranges. The identified
commonality potential on multiple layers of the product architecture
(product and layout platform) is a basis for segment-specific product
differentiation, as shown in Table
2.
Results of product architecture analysis and identified platform
potential
3.2.1. Case PPM
The analysis showed that two layers of the product architecture with
a high commonality potential could be identified. The new concept is
based on the commonality potential on the assembly and on the
layout level, whereas segment-specific functional options and
system integration allow for differentiation. The platforms of the
product family are the standardized assemblies (product platform) and
the standard arrangement of these assemblies (layout platform).
Figure 2 shows the layout platform as the
basic arrangement of assemblies. It is highly decoupled from functional
options and from system integration by coping with a standardized input
and providing a standardized output of material and information
flow.
The standardized system layout as a platform (case PPM).
The definition of the layout platform was based on the coordinated
requirements from the respective viewpoints of sales/marketing,
development, production, and system integration. The layout is designed
as a functionally maximum solution that can be reduced
(defined elements can be removed) according to order specific
requirements.
The product family concept supports the chosen market strategy by
providing a segment-specific product range that is based on the
efficient reuse of platform elements. The layout platform serves as a
robust basis for system design and engineering in different market
segments. It facilitates the efficient variation without increasing
complexity, and at the same time enables the company to design a high
tech (and high cost) system for the higher market segment while
employing economies of substitution.
3.2.2. Case ELO
The analysis of the product architecture showed that two of the four
layers offered substantial commonality potential. The commonality
potential consists on the one hand of assemblies and components with
low variety and a high degree of robustness and stability towards
market demand and technology change. These assemblies are mainly in the
life cycle stage of dominant design and offer high standardization
potential. On the other hand, the layout of the engine room (which
determines the assemblies as well as their interfaces and geometrical
measurements) could also be standardized.
The new product family concept was based on an existing product
platform on the assembly level, and the standardization of the
arrangement of these assemblies in the engine room (layout platform).
Elements with a high differentiation potential, high-tech units with a
short life cycle (e.g., power converters), segment- and
customer-specific options (e.g., communication systems), elements for
the integration of the units to the overall system (cables, piping
system) and the design of the exterior cover did not become
standardized but were modularized to a large extent. With that the
company managed to reduce the effects of combinatorial complexity.
Figure 3 shows the layout of the engine
room as a common basis for the whole product family of electric
locomotives. This platform defines the arrangement of all assemblies in
the machine room, as well as their interfaces and enforces the
realization of different product variants within an identical
layout.
The standardized engine room layout as a platform (case ELO).
The definition and development of the engine room layout was only
feasible through the application of newest technology for miniaturizing
(and standardizing) the assembly sizes to fit within the restricted
space of the engine room. The common layout is the basis for subsystem
interfaces standardization. The assemblies are always positioned in the
same place; cabling and piping between the assemblies runs in the same
guide rails. It is possible to install one, two, and multifrequency
systems in locomotives with the same engine room measurements. Thanks
to small power converters, additional train control systems can be
included without having to enlarge a four-axle locomotive for the multi
system types.
3.2.3. Case EST
The product architecture analysis resulted in two different layers
with high commonality potential. All products within the product family
were based on a range of standardized components, and a common lead
construction, which defines the arrangement (layout) of wires (cf.
Fig. 4). This leaves the coating material,
thickness, and the color as variable differentiation elements. A
component system further supports the selection of wires and coating
materials, and segment-specific selection rules were defined for the
variety of coating material, wall thickness, and color.
The standard lead construction as a layout platform (case EST).
The platform definition was based on an analysis of the current
product range, and the identification of elements with a high potential
for standardization. The standardization of the lead construction
proved in this case considerably simpler than the restriction of the
isolation materials, where compromises between cost, performance, and
manufacturing aspects had to be found. In addition, overengineering
could not always be prevented to ensure product family evolution.
The layout platform defines the arrangement of wires to leads and
decouples the leads from other layers of the product architecture. This
lowers complexity in the product range that is needed for easy
variation of the end-product within tight limits. The so-defined leads
can be produced in a standardized process and kept on stock, before
being processed to customized cables.
3.3. Effects of layout platforms
3.3.1. Case PPM
From 98 sold systems (based on 18 different layouts), 81 systems
(82%) were found to fit within the restrictions of the standardized
layout without affecting customer specifications or cost targets. As a
consequence, the number of features needed to specify the system's
total 15 subsystems could be reduced by 40% from 67 to 40. Within the
restriction of the standardized layout, this results in a limited
variety of subsystems that has to be considered for the design of
systems based on this standardized layout because of the reduction of
design dependencies.
In the low-end market segment, the selection of only a few
standardized, preengineered options is allowed, and the integration of
the system is limited to a standard concept that prohibits the
interconnection of multiple systems. In the middle market segment a
greater variation of predefined options is offered. The system
integration is done within the boundaries of a decision tree that
covers the possibilities of the existing operation control system. In
the high-end (individual) segment the full range of solutions is
offered with considerable efforts in the specification and realization
of the system. The design of segment-specific systems is the key to
entering the low-end market with a restricted range of products, and
within clearly defined cost targets.
Product engineering profits from the complexity reduction through the
layout platform. The standardization of the subsystem arrangement
allows the technical configuration of the overall system. This
facilitates the functional description of the orders as the products
are determined within the standard layout, and it supports the
integration of controls systems. The order processing can be designed
in a segment-specific way. This helps to realize substantial time and
cost savings potential in the low-end market segment through lower
efforts for system specification, engineering, and installation, and
simultaneously lowers the order risk in this market segment. The
segment-specific product range leads generally to differentiated
processes and resource utilization. The resources saved through lower
complexity in the low-end segment can be used for the more demanding
handling of added-value tasks in the high-end (individual) segment. The
reuse of existing concepts is furthermore a means to achieve scale
effects and to increase planning reliability in procurement and
production.
3.3.2. Case ELO
As a result of the standardized machine room layout, the feature set
for specifying the complete system (locomotive) could be reduced from
357 by more than half to 184 features, while still fulfilling the
requirements of 80% of the expected sales volume. The variety of 12
(from total 20) assemblies could be reduced from 1000s to between 4 and
72 assembly types because of fewer design dependencies.
The standard segment provides the basic versions of the locomotives
and covers the low-cost part of the volume market with standard and
preengineered solutions. The customized segment offers planned
deviations from the basic design with a restricted variety of options.
In the individual (high-end) segment locomotives are being engineered
as individual solutions with performance characteristics at the edge of
technological boundaries.
The standardization of the engine room increases the flexibility of
the remaining elements of the product architecture through the clear
definition of interfaces and the restriction of order specific changes.
The necessary flexibility for the realization of customer requirements
is guaranteed by the variation of subsystems with high differentiation
effects. In the same way the evolution of high-tech elements (e.g.,
power converters and train control systems) is ensured. The platform
concept guides the development of the product family within the set
boundaries while keeping considerable freedom in the customer-specific
design.
The layout platform serves as a robust basis for different locomotive
types and allows the integration of custom-built components. As a
result, a locomotive is built to the greatest extent from standard
modules, and custom-made changes are limited to a few (isolated)
modules. Furthermore, the configuration of a locomotive allows the
selection of existing modules and their reuse (within the standard
layout and interfaces). The modular product architecture bypasses the
disadvantages of small lot sizes through the use of identical modules
in different locomotive models. Standardized interfaces allow for the
flexible adaptation of the locomotive to modified mission profiles to
minimize the operating costs (energy efficiency). This reduces the time
and costs of order-specific engineering, increases product quality, and
lowers the efforts for assembly and testing. At the same time the
layout serves as a robust basis for the development and integration of
high-tech components.
3.3.3. Case EST
Of 30 different lead constructions (serving as the basis for 213 lead
types), 12 could be combined in a standardized system layout (based on
a common set of design rules) covering 45 of the lead types and 75% of
the sales volume. At the same time, the number of wire types
(components for leads) could be reduced by 72% from 232 to 63.
The segment-specific definition of both the product range and the
value chain processes enables a differentiated and effective
positioning in the market. Market communication can be focused on the
differentiating elements, which results in highly effective market
segmentation. Customers who find their products in a catalog can order
them directly, whereas customers with needs not diverging too far from
the standard are being served by a configurable solution. This frees
valuable development resources to handle orders with special
requirements. The processes for catalog sale, configuration, and
construction are distinctly different, and cause segment-specific costs
and time expenditures. The use of a component system with defined
combination rules represents a further segment-specific restriction of
the product range.
The product family design is limited by the standardization of the
lead construction (layout platform), and the choice of wires and
coating materials. If a customer requests a change of one of these
elements, it cannot be realized within the framework of the product
family. This conscious suppression of selected variation possibilities
ensures that the product family is not subjected to uncontrolled
increase of variety. By the definition of component variety and design
rules, the product range gains configurability because the necessary
relationship knowledge can be efficiently defined. The components with
differentiation functions (wires, leads, isolation) enable a high
degree of flexibility in the design of leads and cables.
The product realization gains by the definition of the product
families on platforms, insofar as no order-specific development efforts
result from the configuration of leads and cables within the defined
boundaries of the product family. Consequently, more resources are
available for the processing of demanding and value-adding development
tasks. In the end, by the allocation of development resources to
technically complex inquiries, the processing time can be lowered. The
specification of configurable products can be used as an efficient way
to develop an initial set of prototypes. In many cases one of the
prototypes already fulfills the customer needs, and consequently,
considerable cost and time savings can so be realized with low
technical risk.
The platform concept has also significant influence on order
processing. It allows the distinction of segment-specific order types
with different processing efforts. The configuration of products helps
to increase the process quality, capacity, and speed in order
processing. Instead of a response time of up to 3 weeks for customized
cables, offers for products within the configurable range can be
handled within 2 working days. The fast reaction to offer requests
improves the offer success rate and results in higher sales volume.
4. DISCUSSION
4.1. Generalized layout platform potential
4.1.1. Product family positioning: Enabling market
segmentation
The layout platform supports the effective positioning of
the product family in the market. Because the system layout
(arrangement of the assemblies) is standardized across all
market segments, it is not subject to customer-specific specification
and is decoupled from the differentiating elements. It is employed for
the description of possibilities to extend a system through the use of
additional elements within the standard layout. Building up on
a standardized basis, the product range can be positioned in a
segment-specific way. The differentiation of the segments
occurs through functional options and the system integration, subject
to segment-specific rules. The product ranges for the individual
segments represent a specific combination of individual and
standardized layers of the product architecture.
Competitive advantage can be achieved by the optimal combination of
individualization and standardization. The layouts in the case examples
are standardized across all segments, whereas the differentiation
aspects are met by the other layers of the product architecture. This
allows a segment-specific design of the product range. The market
segments are characterized by different levels of variety restriction,
thus providing the basis for differentiation in the high-end
(individual) market segment through high-performance solutions, in the
middle (customized) market segment through efficient variety, and in
the low-end market segment through low-cost and highly standardized
solutions (Table 3).
Segment-specific effects of layout platforms
The segment-specific definition of the product range allows the
effective communication both within and outside the company. It
represents a means of variety management by efficiently offering a
specifically variable product range to different demand clusters in the
market. It fulfills an important communication function through the
clear communication of boundaries for system variety and directs
development efforts within the framework of the product family.
4.1.2. Product family design: Imposing a dominant
design
The product family design is limited by the layout platform. The
standardized layout forms a stable basis for the development and
realization of the entire product family and defines the design options
of the product family to a large extent. The platform limits the
innovation capability, and the challenge is to define these
restrictions to have as little influence as possible on the rest of the
product architecture. The most important requirement for the definition
of a layout platform is the possibility for its decoupling within the
product architecture to achieve independence from changes within the
product family (robustness). This is done by limiting the variety of
subsystem arrangements to facilitate the integration of elements with
differentiating attributes.
The layout platform is a prerequisite for building systems on
existing elements (reusability) while lowering overall system
complexity. This results in greater flexibility in a narrower
defined field. By building a product family on a common (stable)
layout, the remaining elements can be rapidly adapted to variable
needs. Within the boundaries of the standardized layout and the product
family, the potential for efficient variation increases. The
structuring of product architecture limitations and options can be used
as a framework for the distinction of existing (predefined) and new
solutions, and for directing future development efforts.
The case examples show that commonality potential can be realized on
different layers of the product architecture within a product family.
The layout platform has a distinct influence on product variety and
complexity, and it restricts product design flexibility and innovation
capability to the subsystem level. The layout platform appears to be an
effective basis for the definition of subsystem variety and facilitates
the standardization of subsystem interfaces. However, in cases where
the layout proves to be an important element for product variation and
differentiation, this platform type will not be suitable.
In the life cycle framework according to Utterback (1994), product innovation leads to the
emergence of a dominant design, which then is the basis for improving
efficiency through process innovation. A central
characteristic of the layout platform is that is has the potential to
impose a dominant design on a product family, and consequently, lead to
lower complexity and increased process efficiency.
4.1.3. Product family realization: Increasing
configurability
Products based on a layout platform can profit from a more rapid and
less risky development and production. The platform concept allows the
efficient product specification and order processing through the
advanced investment in platform development. The development of the
platform as an investment in the design of the product range can be
high, but as a consequence, the derivative products can be developed
and produced more efficiently (in shorter time and with lower cost).
The platform has a high leverage effect, as is allows the variation and
derivation of products to be incremental in cost and time, compared
with the development of the platform itself (Meyer
et al., 1997). Through the reuse of platforms, companies can
substantially lower the time and the risk for the development of
derived products (Sawhney, 1998).
The striking advantage of layout platforms is that for a complex
product it is comparably easier to standardize the arrangement
of its subsystems than to standardize these subsystems. A layout
platform seems especially suitable for redesigning product
architectures of existing products by supporting the reuse of
developed elements within a clearly structured framework (layout). In
the case studies, their effects were considered less on direct material
and labor cost, but on the whole chain of order processing by reducing
process complexity cost.
Svensson and Barfod (2002) define several
degrees of mass customization (design, manufacturing, assembly,
distribution) between the extremes of pure standardization and
customization. Our approach for CoPS focuses on increasing the
reusability within product families on the design level. The overall
effect of layout standardization allows the product family to make a
step from highly customized ETO processes (with architectural freedom)
to a more mass customization approach (with a standardized system
layout).
The development of a layout platform is useful in cases where the
unrestricted combination of subsystems causes high levels of
complexity, and the restriction on the layout level clusters solutions
with comparable (and lower) complexity. As a result, products based on
this layout can be realized with low design and engineering efforts. By
standardizing the system layout, the design dependencies between and
within the subsystems can be reduced substantially. Lower complexity in
the mapping of functional specification to system elements leads to
increased configurability of the systems. The system description,
consisting of the product family architecture (structure) and the
design dependencies (set of rules) used for the identification of
platform potential is the basis for a product model for the formal
representation of product design (configuration) knowledge (Forza & Salvador, 2002; Salvador et al., 2002). The product family can be
modeled as a configuration type, whereas the functional and subsystem
descriptions form the set of predefined system elements and combination
restrictions (Soinonen et al., 1998). This
representation of product knowledge is facilitated by the layout
standardization.
4.2. Applicability of layout platforms
The platform effects discussed in the preceding section can be
summarized by the tension between the demands for variation
and for innovation. Sanderson and Uzumeri (1997) identify this as an elementary trade-off, in
which companies must use their limited resources (development
resources, budgets, technology options).
Sanchez and Mahoney (1996) describe product
design as a kind of controlled innovation in which companies create new
products through the application of existing and new knowledge about
components and interfaces. To make this knowledge reusable, the
architecture of the products as well as the functions of the components
and their interfaces have to be known. Innovation is thus based on the
creation of new information about components, as well as learning about
the interfaces and configurability of these components by considering
the possibilities of the product architecture. These differences can be
shown in the innovation typology by Henderson and Clark (1990), where they complement the traditional
separation into radical and incremental innovation,
and distinguish between modifications of components and
modifications of the interfaces between these components.
Innovations on the component level and on the interface level have
different effects on competition, and need different organizations for
their realization. In the case of CoPS, considerable reuse potential on
the architectural level exists and can be employed for lowering
complexity and risk in system design, engineering, and manufacturing.
The restriction of architectural choices, however, limits the
innovation capability to the subsystem level.
A product platform standardizes a defined part of the
physical elements of the product architecture and their interfaces to
the nonplatform elements. This platform type mainly influences direct
(material and labor) costs by improving the reusability of the platform
elements. It is suitable when the main focus is achieving efficiency
and scale effects with simultaneously short processing times. The
definition and development of a product platform requires a high degree
of standardized functions and elements as well as the continued
stability of the platform.
A layout platform standardizes the conceptual arrangement of
subsystems. This has a strong influence on system complexity as it
decouples different layers of the product architecture. It is most
suitable for the integration of complex systems (with multiple product
architecture layers), and it affects the complexity and resource
utilization of order processing. It is a means for the coordination of
different functions and can be useful in particular for the realization
of systems with small lot sizes and incompletely decoupled subsystems
that cause complexity in system integration. The layout platform can
lower system complexity and affects process efforts and cost in design,
engineering, and manufacturing.
The different effects of different platform types can be used to
support the segment-specific positioning of a product family (cf. Fig. 5). The combination of different platform
types with their specific effects, and the segment-specific definition
of variety for nonstandard layers of the product architecture allows
for effective differentiation between market segments.
The segment-specific variety of product architecture layers.
However, there are several limitations to consider when deciding for
or against the standardization of system layouts. A layout platform is
not suitable in cases where the variation of the layout is necessary
for system performance of product family evolution, the variation of
layouts has no critical impact on system complexity (i.e., through the
decoupling of subsystems), or the variation of layouts is essential for
differentiation and market demand aspects.
5. CONCLUSION
CoPSs have been widely neglected in the research and discussion of
platform concepts. The fact that these products are developed and
manufactured in single projects or small lot sizes makes the
identification and realization of reuse potential difficult and
challenging. Incomplete decoupling of subsystems leads to high system
integration efforts and to a low level of commonality effects from
product to product.
We introduce the layout platform as a powerful instrument in managing
CoPS. The standardization of the system layout is a suitable way to
reducing system complexity and engineering risk in systems with
multiple hierarchic layers of their product architecture, wide
architectural choices in design, and strong influences of system layout
variety on product and process complexity.
The description of the effects of the platform concept on the
elements of product family management and on the product range shows
that different compromises about the development of platforms with
regard to the flexibility of product family design, the efficiency of
product realization, and the effectiveness of product positioning have
to be taken into account.
We argue that building a product family based on a layout platform is
a powerful strategy for reaching mass customization in case of CoPS.
Combined with the segment-specific restriction of the product family,
different market segments can be served while retaining effective
differentiation.
