Platform Project Management Optimizing Product Development by Actively Managing Commonality

Product platforms have proved to be an effective strategy for designing and manufacturing products in companies that provide different products for different customer needs. By designing common parts and creating product families, these companies have increased the profitability of their product lines leveraging economies of scale by increasing the volume of common parts and by sharing the development costs and investment among different products. However, managing common designs in product family development is not a trivial task. Product commonality usually decreases over time, a phenomenon called divergence, usually present in the development of complex products like automobiles. Furthermore, all the products from the product family will be designed in a product development project; whether they are executed in a major project or in individual projects depend on the complexity and scope of the product. A usual practice has been to develop these products in different projects due to limited availability of resources, creating an additional challenge for managing these common designs because of their different lifecycles, usually contributing to increase divergence. The main focus of this work is to understand the impact of designing a product platform on its associated development project(s) that share their resources including product components, facilities and human resources. The context of the study is scoped towards the dynamic nature of the execution of the project plan, rather than the product planning itself that is well covered by existing literature. To acknowledge the dynamic nature of the project, a system dynamics model that simultaneously simulated the lead and the derivative projects was developed based on their product commonality. The model was calibrated and complemented by a case study based on the development of a product platform in the automotive industry. Divergence rates were measured and were found to range between 0.4% to 1.2% loss of product commonality every month. These typical divergence rates were included into the system dynamics model and were found to cause significant effects to the product development project which can be as high as a 22% schedule overrun or a 29% increase of the required personnel to achieve the planned project schedule. These significant effects to the development project caused by non beneficial divergence should be avoided, concluding that actively managing product commonality can be an effective method to achieve a successful execution of the development projects when the product platform approach is utilized.