Assessing the cost saving potential of shared product architectures. (June 2016)

• Record Type: Journal Article
• Authors: Mortensen, Niels Henrik; Hansen, Christian Lindschou; Løkkegaard, Martin; Hvam, Lars
• Is Part Of: Concurrent engineering, research and applications. Volume 24:Number 2(2016:Jun.)
• Page Start: 153
• Page End: 163
• Publication Date: 2016-06
• Subjects: product architecture -- manufacturing architecture -- modularization -- concurrent engineering; Production engineering -- Periodicals; Concurrent engineering -- Periodicals; 621.39
• DOI: 10.1177/1063293X15624133
• Languages: English
• ISSNs: 1063-293X

Abstract

This article presents a method for calculating cost savings of shared architectures in industrial companies called Architecture Mapping and Evaluation. The main contribution is an operational method to evaluate the cost potential and evaluate the number of product architectures in an industrial company. Experiences from the case company show it is possible to reduce the number of architectures with 60% which leads to significant reduction in direct material and labor costs. This can be achieved without compromising the market offerings of products. Experiences from the case study indicate cost reductions between 0.5% and 2% of turnover. The main implication is that the method provides a quantitative basis for the discussion on whether or not to implement shared product architectures. This means a more fact-based approach is introduced.