Assessing the financial potential for modularization: A case study in a global OEM

Martin Løkkegaard, Niels Henrik Mortensen

    Research output: Chapter in Book/Report/Conference proceedingArticle in proceedingsResearchpeer-review


    Assessing the financial potential of implementing a strategy, based on sharing of key modules and interfaces across a portfolio is difficult. However, this is a critical input when deciding strategic direction in industrial organizations. Through a case study, this paper gives an example of how to map and evaluate the architectures in a portfolio to identify the financial potential for implanting a platform-based modularization strategy. The approach has been applied in a global world-leading OEM with 50.000+ product variants and a turnover of USD 3,5b (2015). The results show a potential for reducing the cost-base by up to 15% through systematically sharing of key design principles across 80% of the company’s portfolio. This has supported the discussion of adjusting innovation strategy in the organization. The core contribution of the paper is the operational application of the systematic Architecture Mapping and Evaluation approach (AME) and discussion of how it can support strategic decision-making related to modularization. The approach builds on the understanding that a top-down assessment can give a starting point for implementing a level of modularity across a portfolio.
    Original languageEnglish
    Title of host publicationProceedings of the 21st International Conference on Engineering Design (ICED 17) : Product, Services and Systems Design,
    EditorsAnja Maier, Stanko Škec, Harrison Kim, Michael Kokkolaras, Josef Oehmen, Georges Fadel, Filippo Salustri, Mike Van der Loos
    PublisherDesign Society
    Publication date2017
    ISBN (Electronic)978-1-904670-91-9
    Publication statusPublished - 2017
    Event21th International Conference on Engineering Design - The University of British Columbia, Vancouver, Canada
    Duration: 21 Aug 201725 Aug 2017


    Conference21th International Conference on Engineering Design
    LocationThe University of British Columbia
    Internet address


    • Platform strategies
    • Product architecture
    • Case study
    • Decision support


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