Cost management and cross‐functional communication through product architectures

Abstract

Product architecture decisions regarding, for example, product modularity, component commonality, and design re‐use, are important for balancing costs, responsiveness, quality, and other important business objectives. Firms are challenged with complex tradeoffs between competing design priorities, face the need to facilitate communication between functional silos, and want to learn from past experiences. In this paper, we present a qualitative approach for systematically evaluating the product architecture of a product family, comparing the original architecture objectives and actual experiences. The intended contribution of our research is threefold: (1) to present a framework that brings together a diverse set of product architecture‐related decisions and business performance; (2) to provide a set of metrics that operationalise the variables in the framework, and (3) to provide a workshop protocol that is based on the framework and the metrics. This workshop aims to improve cross‐functional communication about the product architecture of an existing product family, and it results in practical improvement actions for future architecture design projects. Experiences with this approach are reported in pilots with Philips Domestic Appliances and Personal Care, and Philips Consumer Electronics.

Methods for Cost Management during Product Development: A Review and Comparison of Different Literatures

“…Some studies have looked more broadly and the managerial and implementation issues of component commonality, typically in combination with product platforms and modular designs (Halman et al, 2003;Ismail, Reid, Mooney, Poolton, & Arokiam, 2007;Marion, Thevenot, & Simpson, 2007;Meyer & Dalal, 2002;Meyer & Mugge, 2001;Nobelius & Sundgren, 2002;Salvador, Rungtusanatham, Forza, & Trentin, 2007;Sanchez, 1999;Zwerink, Wouters, Hissel, & Kerssens-van Drongelen, 2007).…”

The Architecture Improvement Method: cost management and systemic learning about strategic product architectures

“…The AIM described in this paper builds on a previous study (Zwerink et al, 2007). The method The Architecture Improvement Method was developed as a joint research project by researchers at the university and Philips AT.…”

“…Such a method, which should be based on a practical framework depicting all critical issues to help product architecture creators in making trade-offs during the architecture creation process, is not yet described in the literature. In the current paper, the architecture improvement method (AIM) developed by Philips Applied Technologies (AT) is presented, based on a product architecture evaluation approach described by Zwerink et al (2007), which is a structured method to discuss an existing product architecture in order to learn and give recommendations towards future product architectures. The AIM is designed to contribute optimally to the accumulation of architectural competences within Philips.…”

“…This literature often promotes and gives detailed insights into the use of modular architectures (Margretta, 1998;Mirapaul, 2001;Sanchez, 2001;Mikkola, 2006). Next to this, more holistic approaches working toward the creation of product architecture methods can be distinguished (Muffatto and Roveda, 2002;Fixson, 2005;Zwerink et al, 2007). These methods aim to analyze product architectures at a companywide, multidisciplinary level, and are labeled as strategic product architectures.…”

Assessing the product architecture decision about product features – a real options approach

“…Product architecture decisions may affect the firm's ability to fulfill new customer requirements. For example, Philips has designed its electrical toothbrush in such a way that the outside shape and appearance can be changed quickly and at low cost, while these design changes do not require any modifications of the core components that include the battery, motor, and electronics (Zwerink et al., ). This enables the firm to bring new products to the market or to supply toothbrushes to retailers who can sell it according to their own design.…”