Cost models for evaluating virtual design strategies in multicycle product families

Rapid technological change and increased competition are forcing firms to compress the time it takes to develop product families and rapidly realize innovations among successive family members (models). Competition in rapidly changing high-variety markets requires effective management of design information across successive generations of products as well as in the same product generation. This paper considers two complementary approaches to design information management: virtual design and modular design. Virtual design describes the abstraction hierarchy used to represent product function. Modular design describes the hierarchy of physical realizations of the product and leads to a group technology approach to manufacturing. An analytical model is used to describe the impact of design management strategy characterized by investment in tools and infrastructure for virtual design and group technology on product development costs. This model provides insight into the impacts on costs of the mix of standard and revised parts in a product family. Virtual design has greatest impact on cost when there is a large proportion of parts revision, while group technology has most impact on cost when large numbers of standard parts are re-used. Effective management strategy for high variety rapidly changing products should combine both of these approaches and emphasize compatible organizational methods and technology integration.