Platform approaches for products and services

Another approach to managing product and service architectures is adopting a platform strategy. Platforms are connected to the concept of a product family, defined as ‘products that share a common platform but have specific features and functionality required by different sets of customers’ (Meyer & Utterback, 1993, p. 30). Such a family shares assets and addresses a certain market, for example, or a customer segment (Meyer & Utterback, 1993; Sawhney, 1998).

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Accordingly, a product platform can be described as a ‘collection of assets that are shared by a set of products’ (Robertson and Ulrich, 1998, p. 20), with the set of products also being the product family. The platform approach is thus concerned with achieving efficiency by standardising assets among products, instead of standardising interfaces between modules, as is the case in modular approaches. Likewise, the chief objectives of platform versus modular approaches differ as well, with platforms being focused on economies of scale and scope, whereas modularity facilitates economies of substitution (e.g. Magnusson & Pasche, 2014).

The standardised aspects of any platform approach can be referred to as commonalities, in which components or functions are clustered based on their similarities (Pirmoradi et al., 2014). The basic principle of a platform approach, both for products and services, is to balance the potential for commonalities among offerings—that is, what can be standardised or reused—with the need for differentiation and variety within the product family (Halman et al., 2003; Hofman & Meijerink, 2015). Commonality can allow lower costs via the effects of economies of scale as well as increased quality (Meyer & Lehnerd, 1997; Robertson & Ulrich, 1998; Sawhney, 1998; Sköld & Karlsson, 2007). At the same time, variety, albeit costly, is valuable when customers’ demands differ. Designing a platform thus becomes the task of determining what common elements will comprise the platform and which will be differentiated elements among the products (Halman et al., 2003). Although product platforms are the most commonly described type of platforms (Zhang, 2015), a range of types of platforms involving various assets exist. One example is process platforms, which can be used for production as well as for supply chains and product development (Sawhney, 1998). In addition to these, Robertson and Ulrich (1998) have described two other platform categories: knowledge platforms and platforms based on people and their relationships. Customer platforms have also been described; therein, a company chooses a beachhead as a basis for expansion into related markets and segments (Sawhney, 1998). Although most research on platforms to date concerns products, some attention has been paid to processes as well (Fixson, 2007), and depending on the offering, assets other than product components might be of commonality potential. Beyond that, platform strategies can also be applied to capitalise on commonalities at different stages of an offering’s life cycle (Halman et al., 2003; Sawhney, 1998; Zhang, 2015), because various assets may hold different value in different phases. As a consequence, an overly strong focus on

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components as a basis for commonality can cause other opportunities for platforms to be overlooked.

As touched upon earlier, platforms have been associated with lower costs by enabling economies of scale, because sharing designs and components reduces the overall costs associated with their development and manufacture (Robertson & Ulrich, 1998; Sawhney, 1998). The potential cost savings afforded by platforms are especially expected in manufacturing operations, as less investment in equipment are needed compared to manufacturing the same variety of products without a platform. Referring to the automotive industry, for example, Muffatto (1999) has reported that, by using platforms, manufacturers can reduce their investments in welding equipment by up to 50%. Because services are generally more personnel-intense and do not involve standardised manufacturing processes with expensive equipment, their potential cost reductions would arguably be less significant. However, Hofman and Meijerink (2015) nevertheless found that the value of services benefits from the use of a platform approach. After all, platforms can reuse knowledge, and when used for solutions, efforts geared towards standardisation enable the use of existing knowledge and resources (Kowalkowski et al., 2015), which requires less investment in new knowledge and, in turn, lowers costs.

Further still, product platforms can also allow companies to significantly reduce the lead times for the development and delivery of new products (Meyer & Utterback, 1993; Robertson & Ulrich, 1998). In the automotive industry, that dynamic is clear when platform development is separate from vehicle development, which shortens the cycle of vehicle development because the underlying basis is already in place (Muffatto, 1999). For services, that division could also allow shorter development times, precisely because processes are decoupled. Consequently, as responsiveness to customers may increase (Robertson & Ulrich, 1998), so too may the degree of flexibility. In that sense, a platform approach can also improve the design quality (Meyer & Utterback, 1993; Sawhney, 1998), because the platform itself can be thoroughly tested and debugged as necessary. In the process, the resources assigned for testing can be reduced overall, which boosts productivity in development (Muffatto, 1999) and lowers costs for each product or service derived.

Although service platforms can occur at different levels of decomposition and also span across them, the most common levels are those of service bundles and service packages or components

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(Brax et al., 2017; Voss & Hsuan, 2009). Pekkarinen and Ulkuniemi (2008) have identified four dimensions of modularity in modular service platforms: the service, the process, the organisational, and customer interface. A shortcoming of that conceptualisation, however, is its failure to distinguish modular from platform architectures, which complicates deriving benefits from each of the two approaches. On a similar note, Yakob and Tell (2007) have interpreted product platforms as being nearly decomposable systems that hence combine a modular with a platform approach. Although such combined approaches with interlinked concepts are common, such combinations do not take the contingencies of their applications into consideration (Magnusson & Pasche, 2014), which can obscure clear paths to organising the development and making decisions. That potential drawback can be especially damaging in the case of product–service solutions, given the heightened complexity of what to share and what to differentiate among solutions. Contrasting those concepts can shed additional light on their use for product–service solutions. Therefore, the next section accounts for differences between platform and modular approaches as well as their application for products and services as described in previous literature.