Assessing the cost saving potential of shared product architectures

Niels Henrik Mortensen, Christian Lindschou Hansen, Martin Løkkegaard, Lars Hvam

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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.
Original languageEnglish
JournalConcurrent Engineering: Research and Applications
Volume24
Issue number2
Pages (from-to)153-163
ISSN1063-293X
DOIs
Publication statusPublished - 2016

Keywords

  • Product architecture
  • Manufacturing architecture
  • Modularization
  • Concurrent engineering

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