Monetary Evaluation of Platform Strategies from variant costs assessment to Economic Value Added

Abstract

Product platforms are frequently applied in industry for efficiently designing product families. The product platform builds the basis for the derivation of multiple offered variants. Changing the product design to a platform design promises many advantages, e.g. economies of scale, faster timeto-market and less design effort in the derivation of new or updated variants. But the planning and design of such a product platform require a high investment. Literature on monetary evaluation of product platforms is mostly focused on variants and their constituting components. The assessment of the monetary success in terms of the economic added value (EVA) of a platform project is missing. This paper presents an approach to calculate costs of a platform project and link them via Net Present Value to known EVA-concepts. With the developed MEPS-approach (Monetary Evaluation of Platform Strategies), a platform project can be assessed regarding its contribution to the company's overall monetary success. The approach can again be broken down to the single variants based on the product platform. Moreover, the break-even of platform projects during the platform lifecycle can be determined. The MEPS can help to identify the most promising platform strategies, based on their underlying platform architectures and their planned product roadmaps.