Mikkel Sohrt

This paper explores the potential for engineer-to-order (ETO) companies to capitalise financially on their modular product architectures by sharing them with their suppliers. Few scholars have studied product architectures being shared across buyers (ETO companies) and suppliers. While the topic’s relevance has previously been demonstrated, scholars tend to leave out details on how the shared elements of architectures, respectively, benefit the company and with what financial effect. The study aims to develop a framework for describing a shared architecture and to test it in a case study of an ETO company and two of its tier-one suppliers. The framework is built on existing research and the case work of this paper. The study identifies three key aspects of a shared product architecture: a common system decomposition, modules and interfaces that are financially driven by interorganisational alignment of key design characteristics, and a series of coordinated activities that are consistent and mutually beneficial for both organisations. The results show that the ETO company saw 10–35% cost saving on supplier scope after developing the shared architecture. The study contributes to the literature on product architectures and provides insights for ETO companies aiming to enhance financial performance through modular architectures.

This article presents a method (the cross-functional architecture matrix, CAM) for identifying the most business-critical architecture decisions for companies applying product architectures to support the design and production of customised and highly engineered products. Although the product architecture literature describes the value of product architectures and suggests concepts and methods for modelling product architectures, existing methods tend to focus on a select few parts of the value chain or a few functional disciplines despite engineer-to-order (ETO) companies being highly cross-functional. Furthermore, the literature suggests that the practical implementation of product architectures is hindered by the complexity of the architecture models and the large number of decisions involved in the implementation and maintenance of the architecture. In this article, we test the suggested method in a case of a company that designs manufacturing plants (usually an investment in excess of 200 M€) and where three major equipment systems were chosen. For each system, cross-functional architecture matrices were applied. In each case, we found that only five architecture decisions had to be made to achieve significant improvements in the system’s performance, including a 30% reduction in installation hours, 76% of commissioning activities moved from the site to workshop, a 6% faster time to production, and a 12% total cost reduction. Practitioners in ETO companies can use the CAM method to support their product architecture development, while researchers can utilise it for future studies on the implementation of product architectures across functional domains and value chains.