Title: The cost of customising: assessing the performance of a modular product programme

Authors: Jeppe Bjerrum Ulrikkeholm; Lars Hvam

Addresses: Operations Management, Department of Management Engineering, Technical University of Denmark, Building 424, DK 2800 Kgs., Lyngby, Denmark ' Centre for Product Modelling (CPM), Department of Management Engineering, Technical University of Denmark, Building 424, DK 2800 Kgs., Lyngby, Denmark

Abstract: Introducing modularity in product development as a mean for dealing with increasing levels of variance within product portfolios has been widely and successfully applied by many companies. It is however important to acknowledge that challenges related to product portfolio variance will not disappear after introducing modularity. A new type of variance on modular level is likely to develop over time. Empirical work carried out in a large international engineering company designing customer specific products confirms that increasing levels of variance within module portfolios can lead to reduced performance according to crucial key performance indicators. The findings illustrate the importance of recognising the potential trade-off when continually complying with unique customer requests. The paper contributes with a detailed insight into a company's competitive performance trade-off on a modular level after introducing mass customisation. The paper also adds a dimension to existing survey-based findings on the potential trade-offs.

Keywords: product modularity; product architecture; mass customisation; product portfolio analysis; product development; modularity metrics; performance measurement; complexity management; trade-offs; modular products; customisation costs; key performance indicators; KPI; competitive performance.

DOI: 10.1504/IJPD.2014.063002

International Journal of Product Development, 2014 Vol.19 No.4, pp.214 - 230

Received: 29 Apr 2013
Accepted: 15 Sep 2013

Published online: 13 Jun 2014 *

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