Product Platforms: Old Idea, New Opportunity For Manufacturers

Thomas Ohnemus

What if ice cream came in only one flavor? Or shoes were sold in only one size? Or eyeglasses were available in only one prescription?

For some products, individualization is an absolute necessity. But the truth is, customers want every product customized to their preferences.

The solution for a growing number of manufacturers is product platforms. While product platforms aren’t a new idea, they’re now being embraced in a big way, as both discrete and process manufacturers, in both B2C and B2B environments, recognize the potential of customizing products to meet individual needs.

Platforming isn’t easy. It requires investment in engineering, process, technology, and cultural change. But the payoffs include lower manufacturing costs, higher manufacturing efficiency, and faster responsiveness to customer demands.

Stepping up to platforms

A product platform is a common design (discrete manufacturing) or formula (process manufacturing) that forms a foundation on which a line of products can be built over time. Product platforms are best known among automakers, which have striven to base multiple models on a single chassis or to use a single engine or drivetrain across multiple models.

In a complex product like a car, platforming can be leveraged across numerous components, from large (suspension) to small (radio knobs). And in the digital era, embedded software can enable platforming – for example, a single car engine electronically tweaked to deliver different horsepower or gas mileage.

Product platforms were first implemented to reduce costs and increase efficiencies. Leveraging common components improves economies of scale and allows manufacturers to deliver individualized products more quickly.

But for a new generation of product platformers, the goal is customer-centricity. Companies report that 37% of their customers value and 53% strongly value individualized products, according to the SCM World Value Chain 2020 survey. But without platforms, it’s often too costly and time consuming to customize products.

Platforms as change agent

Product platforms aren’t easy, however. First, you need to carefully assess your product portfolio – along with the many individual components that go into that portfolio – to identify opportunities for platforming. Next, you need to embrace change across engineering, process, technology, and culture:

Engineering change – Your products will have to be re-engineered to be built from platforms. In some cases that might not be difficult. It should be straightforward to base entry-level, mid-level, and professional hair dryers on a common motor, fan, and housing, with different switches, cords, and attachments among the three models.

But if you want a compact car, a full-size car, and an SUV to share a steering mechanism, you need to design from a blank sheet. That’s also probably true if you want to let customers custom-configure products.

Process change – Your production processes will have to be flexible enough to combine common platforms with customizable components – and deliver the final product in a time frame the customer finds acceptable.

Your supply chain might also have to be transformed. Rather than aggregate raw materials at a centralized facility, you might source components from suppliers and assemble them close to the customer. Or, final assembly might leave your hands altogether. Imagine you’re a food-products company serving restaurants that 3D-print custom pasta. Now you’re simply shipping raw materials to the end of the supply chain, where the “manufacturing” occurs in real time.

Technology change – You may need to make IT investments to support platforming. First, you need to capture demand signals. That will probably involve Big Data initiatives to understand market trends and customer desires. It might also mean a sophisticated e-commerce engine that supports online customization.

Second, your production line will have remain – or become – as automated as possible if you want to deliver individualized products quickly and cost-effectively. That will likely mean tighter integration between the shop floor and the top floor. It might also entail Internet of Things (IoT) sensors and intelligent production equipment.

Cultural change – Engineering will have to accept that the customer has become a partner in product design. Production will have to become more collaborative with external suppliers. And silos will need to disappear among departments, because the only way to deliver individualized products quickly and cost-effectively is if every function is working in unison.

A podium finish

In the past, car shoppers could purchase a base model or add packages of extras. Today, carmakers like BMW take a build-to-order approach in which customers can configure a highly individualized vehicle and accept delivery in less than six weeks. In Europe, consumers can choose from 11 models, 36 body types, as many engine types, and a huge array of individual options.

Manufacturers that leverage product platforms to achieve such levels of product individualization can realize tremendous benefits. They can lower manufacturing costs, increase manufacturing efficiency, and respond faster to customer demands. They also gain the opportunity to better attract and retain customers – and out-compete their rivals.

Digitizing your extended supply chain will enable your organization to run as a Live Business – one that has the ability to sense, respond, learn, adapt, and predict to create value in the moment. It will provide you with live, real-time insight into the data you need to accelerate decision making.

Download Individualized Products: The Burning Platform for Future Competitiveness to explore how live data can get started today.

Thomas Ohnemus

About Thomas Ohnemus

Thomas Ohnemus is the Vice President, Solution Marketing, Customer Value Office, at SAP. He is responsible for driving the go-to-market strategy, messaging, and demand generation. Thomas has over 25 years’ experience in business software solutions and his PLM expertise has awarded him key management positions in consulting, product management, service, and global marketing. He holds a master’s degree in engineering, and lives in Germany.