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Quantifying the Effects of Modular Product Architectures: A Data-Driven Framework for Evaluating Product Variety and Complexity

  • Jakob Meinertz Grønvald*
  • , Morten Nørgaard
  • , Carsten Keinicke Fjord Christensen
  • , Niels Henrik Mortensen
  • *Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

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Abstract

Manufacturers increasingly face the challenge of delivering high product variety while managing the internal complexity and costs this creates across the value chain. Modular product architectures are often promoted as a solution, yet adoption remains limited due to the absence of robust, quantitative tools for evaluating their systemic effects. This study develops and applies a data-driven framework that explicitly links product variety and complexity to overhead activities across the value chain. The framework integrates principles from time-driven activity-based costing (TDABC), complexity management, and hierarchical product decomposition, and is operationalized through a structured methodology that combines semi-structured interviews, enterprise resource planning (ERP) data analysis, and model-based simulations. This enables the allocation of previously untraceable cost pools such as engineering, procurement, production preparation, and sales hours to the product structure. Application in an engineer-to-order (ETO) equipment manufacturer demonstrates how the framework can identify high-impact subsystems, quantify potential reductions in engineering and procurement hours, and support scenario testing of alternative product architectures. The results indicate that even approximate estimates provide valuable, directional insights into customization-driven cost distributions. The study concludes that the framework constitutes a scalable and flexible decision-support tool for bridging the gap between theoretical modularization benefits and their quantification in industrial practice.
Original languageEnglish
Article number12284
JournalApplied Sciences
Volume15
Number of pages21
ISSN2076-3417
DOIs
Publication statusPublished - 2025

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