Cost Effects of Modular Product Family Structures: Methods and Quantification of Impacts to Support Decision Making

Abstract

Customer demands and global markets prompt companies to offer increasing product variety. The use of modular product structures is a possible strategy for providing the necessary external variety to the market and reducing costs by lowering internal variety within the company. Current research provides several approaches for developing modular product family structures. As modularity is a gradual property, these methods generate different product structure concepts and companies have to decide at an early stage and without detailed information which concepts to implement. Most existing modularization methods offer only little or no support for decision making, particularly in terms of cost effects. This article illustrates the cost effects of variety and modular product family structures, the various cost impacts of variety management strategies and modularization methods in a literature review. A new approach to quantify these cost effects to support concept selection during modular product family design is introduced.