A Roadmap for Product Architecture Costing

In recent years many markets have exhibited increasing demand heterogeneity; they are fragmenting into more and smaller market niches. This development threatens the large-scale assumption of many mass production processes. As a result, firms face the dilemma of how to provide a wide variety of goods for prices that can compete with mass produced products. To respond to these challenges, many firms have begun searching for ways to combine the efficiency of mass production with the variety of customer-oriented product offerings. A major focus of these efforts has been the fundamental structure of the product: the product architecture. Examples for this development are Sony’s personal music players (Walkman) that use common drives across different models (Sanderson and Uzumeri 1995), different power tools that use similar motors (Meyer and Lehnerd 1997), PDAs (personal digital assistant) that with different attachments can be turned into an MP3 player, a camera, or a telephone (Biersdorfer 2001), and automobiles with common components across models (Carney 2004). Researchers of disciplines ranging from engineering to management have focused their attention on these phenomena, and have developed tools to guide the difficult process of providing variety to the customer while maintaining near-mass production efficiency, i.e., to ‘mass customize’ (Pine 1993). The approaches vary in their perspective and level of analysis. Some focus more on ways to increase external product variety while maintaining low costs, while others target their efforts on internal variety reduction without losing the variety appeal for the customer. The underlying idea of most of these approaches is to increase commonality across multiple products. The level in the product hierarchy at which commonality is pursued varies: it can be focused on common components (Eynan and Rosenblatt 1996; Fisher et al. 1999), on modules (Chakravarty and Balakrishnan 2001; Dahmus et al. 2001; Sudjianto and Otto 2001), on product platforms and product families (Gonzalez-Zugasti et al. 2000; Jiao and Tseng