Transcript No Slide Title

Product Family Maps and Platform
Leveraging Strategies
ME 546 - Designing Product Families - IE 546
Timothy W. Simpson
Professor of Mechanical & Industrial
Engineering and Engineering Design
The Pennsylvania State University
University Park, PA 16802 USA
phone: (814) 863-7136
email: [email protected]
http://www.mne.psu.edu/simpson/courses/me546
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© T. W. SIMPSON
Overview of Lecture
• Approaches to Product Family Design
• Recap Key Definitions from Day 1
• Product Family Maps
• Market Segmentation Grid
• Examples of Platform Leveraging
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Motivation for Product Families
• Today’s market is characterized by:
rapid innovation
 globalization and customization
 market saturation, fragmentation, and niching

“Since many companies design new products one at a
time, the focus on individual customers and products
often results in a failure to embrace commonality,
compatibility, standardization, or modularization among
different products or product lines.”
(Meyer and Lehnerd, 1997)
“Rarely does the full spectrum of product offerings get
reviewed at one time to ensure it is optimal for the
business.”
(McGrath, 1995)
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Why Product Families?
• The end result:

a “mushrooming” or diversification of products and
components with proliferating variety and costs
• Many companies are being faced with a challenge:

provide as much variety for the market as possible...
...with as little variety between products as possible
• To remain competitive, companies are utilizing product
families and product platforms to:
increase product variety
 shorten product lead-times
 reduce cost

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Definition of Key Terms
• What is a product family and a product platform?
• Product family:

a group of related products that share common features,
components, or subsystems; and satisfy a variety of markets
• Product platform:

the set of features, components or subsystems that remain
constant from product to product, within a given product family
• Derivative:

products derived from the product platform through:
– addition, removal, or substitution of one or more modules
( module-based product family)
– scaling or “stretching” the platform in one or more
dimensions ( scale-based product family)
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Basic Approaches to Product Family Design
• Top-down Approach (Proactive platform):
a company strategically manages and develops a family of
products based on a product platform and its module- and/or
scale-based derivatives
 Examples:

• Bottom-up Approach (Reactive redesign):
a company redesigns/consolidates a group of distinct
products by standardizing components to improve economies
of scale and reduce inventory
 Examples:

• Our primary focus is on the former since it eliminates
the need for the latter; however, tools and metrics for
both will be discussed – starting with platform planning
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Source:
Volkswagen A-Platform
Development Car Division
Audi A3
(3+ 5-door)
Audi TT coupe
Audi TT roadster
VW Golf IV
(3+5
door, station
wagon, convertible,
and Minivan)
VW Bora
VW Beetle
Skoda Octavia
(Bora sedan, coupe,
convertible, and
station wagon)
(New Beetle,
New Beetle
convertible)
(Octavia sedan,
and station wagon)
• VW plans for 19 vehicles based on A-platform
• VW estimates development and investment
cost savings of $1.5 billion/yr using platforms
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Seat Toledo
Successor
(Toledo, coupe, station
wagon, and convertible)
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Common Components in Volkswagen Platform
Source:
• Shimokawa, K., Jurgens, U., and Fujimoto, T. (Eds.), 1997, Transforming Automobile Assembly, Springer, New York.
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Automobile Platforms at Ford
Source:
(C. Moccio, K. Ewing,
G. Pumpuni, MIT, 2000)
• At Ford, an automobile platform includes:
A common architecture (e.g., assembly sequence, joint
configuration, system interfaces, etc.)
 Definition of subsystem and module interfaces
 A set of common hardpoints used by the range of products that
share the platform and the manufacturing processes

• Ford defines a platform as a set of subsystems and
interfaces that form a common structure from which a
stream of derivative products can be efficiently produced
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Global Product Development at Ford
• Ford now takes a similar approach as VW in
their new global product development system



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Underbody team perfects the chassis, powertrain
and other elements of the underlying platform
Upperbody teams focus on the part of the vehicle
the consumer sees and feels
Result: work on multiple vehicles based on the
same platform at the same time
Source: The Detroit News, June 21, 2006
© T. W. SIMPSON
Smart
common car features
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Source: http://www.smart.com
© T. W. SIMPSON
Source:
www.prtm.com
Alternative Definition of a Platform
• Platform = set of platform elements and architectural
rules that enable a set of planned product offerings

Platform enables multiple product offerings, allowing increased
leverage and re-use across the product line
Architectural rules/standards govern how technologies and
subsystems (“platform elements”) can be integrated
 Defines the basic value proposition, competitive differentiation,
capabilities, cost structure, and life cycle for a set of products

• Elements are the building blocks of a platform that can
be varied within certain platform constraints
C
B
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C
D
B
E
B
C
E
A
A
A
Product 1
Product 2
Product 3
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Top-Down Approach to Product Family Design
• In the top-down approach, product families do not
emerge one product at a time

“They are planned so that a number of derivative products can
be efficiently created from the foundation of a common core
technology” (i.e., a product platform)
• Product platforms do not just come off the shelf; they
must be planned and managed from start to finish

“If platform is not rejuvenated, its derivative products will
become dated and will fail”
• It is important to see the evolution of a product family in
order to expose the markets and technologies that have
been driving its evolution and identify new opportunities
for technological advancement and leveraging
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Product Family Maps
Increasing Functional Value
• Used to map evolution of product family, platform, and
derivatives over time; see (Wheelwright and Clark, 1989)
Development Work
Prototype
Enhanced
Customized
Core
Cost
Reduced
Leveraged Products
Hybrid
Core
Time
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Example Product Family Map: Vacuum Cleaners
Deluxe
Development Work
Maybel’s
Housekeeper
Plus
Royal
Housekeeper
Workman
Stratovac
Stratovac
Housekeeper
Canadian
Leveraged
Products
1950
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
Reference: Wheelwright, S. C. and Sasser, W. E., Jr., 1989, "The New Product Development Map," Harvard
Business Review, Vol. 67, pp. 112-125.
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Product Family Maps (cont.)
• Used to map product families, product platform renewal,
and their evolution (Meyer and Lehnerd, 1997) 2nd Generation
Platform Extension
1st Generation
New features,
cost reductions
Original Product Platform
Platform
development
Plan multiple
generations
Derivative Product 1
Product 2
New market
applications
Derivative Product 1
Product 2
Product 3
Product 4
Product n
3rd Generation
New Product Platform
Reference:
Meyer, M. H., and Lehnerd,
A. P., 1997, The Power of
Product Platforms, The Free
Press, New York.
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Next generation
platform
Derivative Product 1
Product 2
Integrate the best of the
old with new technology
Product n
© T. W. SIMPSON
Example Product Family Map: Gillette Razors
Trac II
Atra
1st Generation
Advanced twin-blade razor
Men’s Sensor Excel
New features,
cost reductions
New twin-blade razor platform
Platform
development
Men’s Sensor
New market
applications
Sensor
Excel
for
Women
2nd Generation
Plan multiple
generations
Next generation
platform
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Sensor
3rd Generation
for
Integrate the best of the
Triple-blade
Women razor cartridge
old with new technology
Mach 3
Venus
Mach 3 Turbo
Venus Divine
M3 Power
Venus Disposable
Venus Vibrance
M3 Power Nitro
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Identify Platform Leveraging Strategies
• Market segmentation grid can be used to identify and
map platform leveraging strategies (Meyer, 1997)
High Cost
High Performance
Mid-Range
What Market Niches
Will Your Product Serve?
Low Cost
Low Performance
Segment A
Segment B
Segment C
Derivative Products
Product Platform
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Platform Strategies: No Leveraging
• Niche-specific platforms (products) with very little
sharing of subsystems and/or manufacturing
processes
High-end
Product 1 Product 3 Product 4
Mid-range Product 2
Low-end
Segment A Segment B Segment C
• Disadvantages:
R&D can be easily duplicated by different product teams
 Manufacturing and capital investments much higher
 Manufacturing improvements not adopted by others
 Potential for synergy in marketing development is lost

• Result: myriad of products, higher costs, lower margins
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Platform Strategies: Horizontal Leveraging
• Horizontally leverage platform subsystems and/or
manufacturing processes across different segments
High-end
High-end platform
Mid-range
Low-end
Low-end platform
Segment A Segment B Segment C
• Benefits:
Introduce series of related products for different customer
groups without having to “reinvent the wheel”
 R&D can develop products more rapidly and with less risk
(since technology has been proven in other market segments)
 Manufacturing procurement and retooling costs can be
minimized

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Platform Strategies: Vertical Leveraging
Mid-range
Low-end
Platform 1
Scale down
High-end
Scale up
• Vertically scale key platform subsystems and/or
manufacturing processes within a market segment
Platform 2
Segment A Segment B Segment C
• Benefits:
Leverage knowledge of customer wants and needs within a
given market segment
 Product development is less costly (R&D and manufacturing
enjoy same benefits as horizontal leveraging)

• Risk:
Weak platform may undermine competitiveness of product family

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Platform Strategies: Beachhead Approach
• Beachhead approach combines horizontal leveraging
with upward vertical scaling
High-end
Mid-range
Low-end
Platform
Segment A Segment B Segment C
• Key Aspects:
Develop low-cost, effective platform and efficient processes
 Scale up performance characteristics of low-cost platform to
appeal to needs of mid- and high-end users
 Extend platform for customers in different market segments
 Combine extensions and scaling to provide step-up functions
required by mid- and high-end users in other segments

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Example Leveraging Strategies: Gillette Razors
TripleBlade
Razor
Men’s
Mach3
Advanced
TwinBlade
Razor
Men’s
SensorExcel
Women’s
SensorExcel
TwinBlade
Razor
Men’s
Sensor
Women’s
Sensor
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Men
Venus
(Women’s
Mach 3)
Women
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Example Leveraging Strategies: B&D Cordless
Industry
(Heavy)
Use
MidRange
Home
(Light)
Use
Saws
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Drills & Drivers
Lighting
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Example Leveraging Strategies: B&D Cordless (cont.)
• Vertically leverage
power supply around
9.6, 12, 14.4, and 18
volt batteries
• Horizontally leverage
power supply within
each voltage range
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Market Segmentation at Innovation Factory
• Market analysis led to
market segmentation
into three sizes (small,
medium, large)
 FlexiBlade Platform
Ice Scraper Family
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Winning Platform Strategies
• Improves the attractiveness and cost position of your
products through standardization, modularity, and better
economies of scale through use of common subsystems
• The end result:

a well-researched, multi-year, multi-product strategy that can be
presented to management for funding on a multi-year basis
• Allows companies to “recapture the entrepreneurial
essence” of their early years:
to be fast moving
 to achieve competitive excellence in technology
 to leverage common assets across individual products

• A new mindset?

Obsolete your own products with better ones through
continuous product platform renewal
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Defining a Platform Strategy
1. Segment your markets
2. Identify growth areas
3. Define and map current product platforms
4. “Clean-sheet” a new product platform
5. Perform in-depth research in customer needs
6. Analyze competing products
7. Revisit manufacturing process and distribution
channels
8. Understand the core competency implications of the
new product platform
9. Formulate platform development team, project
timeline, and budget
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Product Family Planning
High Cost
High Performance
Mid-Range
Low Cost
Low Performance
Entry premium
product
(features/cost)
Entry premium
product
(features/cost)
Entry premium
product
(features/cost)
Entry mid-range
product
(features/cost)
Entry mid-range
product
(features/cost)
Entry mid-range
product
(features/cost)
Entry low-end
product
(features/cost)
Entry low-end
product
(features/cost)
Entry low-end
product
(features/cost)
Initial Platform
Segment A
Platform Extension Platform Extension
Segment B
Segment C
Shared Product Platform
Common Subsystems and Interfaces
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Product Platform Planning at Xerox
• Xerox recognizes that product platform
planning can enable increased
participation in the marketplace at
greater levels of RD&E productivity
• The process at Xerox for the creation
of product platforms and product
families that meet the needs of the market and voice of
the customer is called the market attack plan
• It is a major component of the annual corporate
strategic planning process
The following is taken from a lecture on product platform planning given at MIT by Maurice Holmes in
16.882: Systems Architecting on December 3, 1999. Used with permission.
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What is a Product Platform at Xerox?
• A product platform at Xerox is:

A set of platform elements

A set of architectural rules that aggregate those elements into
products and services

A set of value chain plans and strategies that enable
successful capture of the business opportunity.
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Xerox’s Market Attack Plan (MAP) - Terminology
A Market is a large group of customers with
common needs/problems, who purchase a
common class of products and/or services
for similar uses of applications.
Standards are the set of product
requirements that all products must
comply with to meet corporate
business objectives and legal codes.
A Market Segment is a group of
customers within a market with
very similar concerns and
requirements.
Supporting Value Chain Plans
are the top-level plans for services,
marketing, sales and distribution,
and manufacturing and logistics.
A Product Offering includes the
product and the other supporting
value chain capabilities and targets
one or more market segments
within the larger market.
A Product Platform is the set of
architectural rules and product
platform elements that enables the
planned product offerings and
defines the value proposition.
Set of Product Offerings are
based on a single product platform
and optimally cover many market
segments within the larger market.
Architectural Rules are the rules
governing how the product
platform elements are to be
integrated, along with the
necessary elements of the overall
element set, to form the product
offerings in the MAP.
Resources & Skills required to
succeed over the life of the MAP and
are allocated as part of Aggregate
Resource Planning.
Product Platform
Elements are the
subsystems (HW &
SW), processes, and
process enablers
which are reused
within the set of
product offerings.
Economic Case estimates the economic viability of the MAP.
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Other Elements comprise the
remaining elements required to
develop the complete set of
product offerings.
© T. W. SIMPSON
Source:
(M. Holmes, 1999)
Office Color Segmentation
Box, TCO
TCO, Box
Price Focus
Output Speed
Box
Paper Handling
A4
A4, A3,
Duplex
High
A4, A3, Duplex,
Finishing
($1,000 - $7,000)
($7,000 - $15,000)
($15,000 +)
Good
High Service/
Support
Want Full
Functionality
Functionality
60,000 Units
300,000 Units
10,000 Units
($600 - $3,000)
($3,000 - $8,000)
($8,000 +)
Copy
Print
Scan
Fax
MF
High
Cost
Focus
50,000 Units
90,000 Units
20,000 Units
($400 - $2,000)
($2,000 - $5,000)
($5,000 +)
Little Service/
Support
Print
650,000 Units
130,000 Units
75,000 Units
Small Workgroup
2-4 users
Medium Workgroup
5-24 users
Large Workgroup
25+ users
Ease of
Use
“High Unit UI/
Value” Driver
UI
TCO
Workflow
Driver
UI /
Unit UI
Print +
Low
Secondary
Want Selected
Functionality
Want Single
Functionality
Functionality
“Low
Cost”
Box
Driver
UI
Speed/Capacity
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© T. W. SIMPSON
Source:
(M. Holmes, 1999)
Market Attack Plan
Platform elements are combined according to architectural rules to
yield products for specific segments
Platform Elements
1. Option A1
2. Option A2
B. IOT
1. Option B1
2. Option B2
3. Option B3
C. Controller
1. Option C1
2. Option C2
3. Option C3
4. Option C4
D. Client
1. Option D1
2. Option D2
3. Option D3
E. Scanners
1. Option E1
2. Option E2
3. Option E3
4. Option E4
Platform
Elements
Want Single
Functionality
A. Coherence
Want Selected
Functionality
Want Full
Functionality
High
Value
Low
Cost
Product 2
Product 5
Product 6
Small Workgroup
2-4 users
Product 4
Medium Workgroup
5-24 users
G. Services
1. Option G1
2. Option G2
3. Option G3
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Large Workgroup
25+ users
Speed Capacity
F. Finishers/DocHandlers
1. Option F1
2. Option F2
3. Option F3
4. Option F4
Product 1
Product 3
Product:
Product 1
Product 2
Product 3
Product 4
Product 5
Product 6
= A1,
= A2,
= A2,
= A2,
= A2,
= A2,
B1, C1, D2, E1, F1, G3
B1, C2, D1, E1, F1, G3
B2, C2, D1, E2, F2, G3
B2, C4, D1, E0, F2, G1
B3, C2, D1, E4, F4, G3
B3, E4, D1, E0, F4, G1
© T. W. SIMPSON
A Steady Revenue Stream
• Platform strategies can provide a steady pipeline of
flow and enable steady growth
R
E
V
E
N
U
E
E
F
D
B
C
A
TIME
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Another View on Attacking the Market
Source:
www.prtm.com
• Leverage your platform to create a market attack plan
1.
Leverage core technology into
new products for same market
2. Use unique skills to create a
new products for same market
3. Expand into a related market
4. Expand into a new market with
a similar application
5. Leverage core technology into
a related market
6. Leverage core technology into
a new market with a similar
application
7. Use unique skills to expand
into a directly related market
8. Use unique skills to expand
into a new market with a similar
application
9. Diversify into a new market
10. Diversify into a new business
11. Diversify into different products
This slide adapted from Patrick Gordon’s (Director, PRTM), “Tapping the Full Potential of Product Platforms,”
IIR Platform Management for Continued Growth Conference, Atlanta, GA, December 1, 2004
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Product Family Development
• In the next class, we will simulate what it is like to work
in a product development team
• Each of you will be randomly assigned to work within
one of the following areas
Customers
 Marketing
 Engineering
 Manufacturing
 Quality Control/Testing

Platform Manager
 Inventory
 Accounting
 Purchasing
 Suppliers

to design, build, and test a successful product family
Please be here promptly at 8:15 a.m. so that your
company can develop its products on time!
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Platform Strategies: No Leveraging
• Niche-specific platforms (products) with very little
sharing of subsystems and/or manufacturing
processes
High-end
Mid-range
Low-end
Segment A Segment B Segment C
• Disadvantages:




• Result:
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Platform Strategies: Horizontal Leveraging
• Horizontally leverage platform subsystems and/or
manufacturing processes across different segments
High-end
Mid-range
Low-end
Segment A Segment B Segment C
• Benefits:



• Risks:

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Platform Strategies: Vertical Leveraging
• Vertically scale key platform subsystems and/or
manufacturing processes within a market segment
High-end
Mid-range
Low-end
Segment A Segment B Segment C
• Benefits:



• Risk:

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Platform Strategies: Beachhead Approach
• Beachhead approach combines horizontal leveraging
with upward vertical scaling
High-end
Mid-range
Low-end
Segment A Segment B Segment C
• Key Aspects:



• Risks:

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© T. W. SIMPSON