Product Family Strategy and Platform Design Optimzation

1 Abstract Numerous manufacturing industries are seeking ways to reduce manufacturing costs and development times of product families through implementation of platform strategies. Deploying several variants from a single product platform can yield considerable savings in time, cost and maximize profits. It is, however, generally accepted that product platforms impose design and component reuse constraints that can lead to a compromise in performance, relative to a set of individually tailored products. Currently, a number of methodologies to determine an optimum product platform architecture have been developed. These methodologies are helpful in determining the components that should be common between products and therefore represent the constituent elements of a product platform. However, a company producing a large number of products also has to determine the total number of platforms to deploy along with the most appropriate leveraging strategy with respect to the target market segments. It appears that little research has been done on systematically determining the optimum number of product platforms to maximize overall product family profitability. In this paper, a methodology is presented to determine the optimum number of platforms to maximize overall profit for a product family given a set of simplifying assumptions. The methodology is based on a careful analysis of the target market segments, the identification of the performance vs. price position of the segment leaders and a bi-level design optimization scheme to simultaneously optimize platform and variant designs. The usefulness of the methodology is demonstrated for a hypothetical set of automotive vehicle platforms that attempt to serve seven different vehicle market segments. It is found that the use of three distinct platforms will maximize overall profit by pursuing primarily a horizontal leveraging