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Planning for Product Platforms

July 15, 1998 | David Robertson, Karl Ulrich | Strategy

By sharing components and production processes across a platform of products, companies can develop differentiated products efficiently, make their manufacturing processes more flexible, and take market share away from competitors that develop only one product at a time. The platform approach also enables companies to manufacture products in high volumes that are tailored to meet the needs of individual customers.

A platform is a collection of assets -- components, processes, knowledge, people, and relationships -- that are shared by a set of products. The platform planning effort involves two key tasks. First, product planning and marketing managers determine which market segments to enter, what the customers in each segment want, and what product attributes will appeal to those customers. Second, system-level designers decide what product architecture to use to deliver the different products while sharing parts and production steps across the products.

Using an example from the automobile industry -- the design of an instrument panel, or dashboard -- the authors illustrate how the platform-planning process works. They point out three key ideas that underlie the process:

1. Customers care about distinctiveness, how closely the product meets their needs. At the same time, the cost of a firm's internal operations is driven by the level of parts held in common among a group of products.

2. Given a particular product architecture, a trade-off exists between distinctiveness and commonality.

3. Product architecture dictates the nature of the trade-off between distinctiveness and commonality.

By developing and aligning three tools -- a product plan, a differentiation plan, and a commonality plan -- managers can balance the need for distinctiveness with the need for commonality. Together these tools provide a common language that a company's marketing, design, and manufacturing functions can all understand. To successfully meet the challenges inherent in the platform approach, the process must be cooperative, involving all key functions, and must be guided by top management.

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