Assessing value in platformed product family design

A platform is the set of elements and interfaces that are common to a family of products. In this paper, the design of a platform-based product family is formulated as an optimization problem. This optimization is then transformed into a two-step process amenable to industrial product design processes. The first step involves designing the technical aspects of the product family, optimizing an objective (or a set of objectives) subject to technical constraints, with external uncertain factors fixed. We have previously presented such a method for designing product families based on platforms that optimizes performance and cost metrics, using variables and a system model. That approach allows a team of engineers to design and evaluate candidate platforms, given perfect understanding of the designs and requirements. The second step is to quantify the value to the firm for each identified design alternative, while here accounting for external uncertain factors of the product family development. In this paper we present a model to perform this second step of the overall approach. Real options concepts are introduced to model the risks and delayed decision benefits present during product development due to uncertainty in technologies, funding, etc. We develop a quantitative measure of the value to the company for different family designs, and apply it to select the most appropriate design from the possible alternatives. An application to the design of platform-based families of spacecraft is shown.