Managing affordability in concept development of complex product systems (CoPS)

Abstract

This study originates in a recognised unsustainable cost escalation for complex defence equipment. In order to understand how such cost escalation for complex product systems (CoPS) can be avoided, this study comparatively explores four different industrial sectorsenergy, transportation, healthcare and defencewith and without intergenerational increasing costs, represented by four international companies. The results, collected from studying the development of one of each company's products, reveal some characteristic differences in market factors between those sectors and companies having problems with intergenerational escalating costs and customer affordability, as compared to other sectors and companies. It is suggested that dependent on market characteristics, it might be necessary to actively manage affordability when CoPS are developed. Efforts made by the companies to make products more affordable were identified, and several factors enabling and disabling the development of less costly products without compromising customer needs were explored. Further, the implications of affordability management in a CoPS setting are elaborated on.

How Does Successful Catch-Up Occur in Complex Products and Systems from the Innovation Ecosystem Perspective? A Case of China’s High-Speed Railway

“…Key components and complementary components need distinct technology knowledge. Thus, the number of components, the degree of customization, the range of the knowledge base, and the capabilities of suppliers can influence the complexity of CoPS [1,51]. Within the product architecture of CoPS, alternative designs for particular components may exhibit disruptive performance at the system level [26].…”