Concept for the cost prognosis in the industrialization of highly iteratively developed physical products

Abstract

With the ongoing technological progress and increasing global competition, companies are facing a continuously changing market environment. Due to the volatility of the market, rapid product adjustments and shorter product life cycles are required. Changing customer requirements are rarely taken into account, leading to inventions that do not make the transition to innovations. Highly iterative product development poses a possibility to integrate the customer voice into the development process and thus shorten the time-to-market and enable companies to respond to changes in requirements. Within the scope of highly iterative product development methods, cost analysis remains one of the main challenges for companies. Since the scope of development is not known at the beginning of a project, neither development nor industrialization costs can be specified. This, however, is essential for product and process development to meet cost-related customer requirements and for forecasting the production and investment budgets. With existing methods, it is either possible to agree to a fixed development budget and target price or to enable the customer to make changes during development. The concept presented in this paper aims to counteract this challenge. Therefore, existing approaches are analyzed with regard to derived requirements for the transfer from highly iterative and integrated product and process development to agile cost analysis. Influencing factors on product and production process costs are identified based on findings from literature. By aligning the influencing factors and requirements, dependencies between target costs of a product and degrees of freedom of highly iterative product and production process development can be derived and used for the development of a framework for iterative cost analysis. In conclusion, a concept for an agile cost prognosis for the industrialization of highly iterative developed physical products is presented.