A modelling and simulation approach for linking design activities to business decisions

Abstract: The business environment of the manufacturing industry is changing from a hardware-based product focus to a process and function focus. A current industrial interest is the development and sale of functions. This function could be realised as a product based on hardware, software and services, and may be sold as a function rather than as hardware. This function view is referred to as Functional Products (FP). The new focus for the customer is on value rather than hardware. This presents new challenges for how engineering hardware design may best be carried out. Sale of functional products requires a changed business model in which the price of the functional product is related to the functionality of the product itself; hence the name functional product. The supplier can in such a scenario no longer sell maintenance and spare parts. Instead, these activities become a cost, thus motivating the supplier to increase process efficiency, decrease internal production cost by using less energy per produced unit andincrease knowledge about use-cases. The researcher's challenge is how to create new knowledge regarding functional product development for academic as well as for industrial benefit. The research question was formulated as: How may methods or tools for design process modelling and simulation be developed to support functional product development? Four case studies were carried out in Swedish industry. Case study 1 was carried out in cooperation with Hägglunds Drives AB. Case study 2 was carried out in cooperation with companies Hägglunds Drives AB, Volvo Aero and Volvo Car Corporation. Case study 3 was carried out in cooperation Volvo Aero and Case study 4 was carried out in cooperation with nine industrial companies during the formation of the Faste Laboratory, Centre for Functional Product Innovation. Results include the need for integrating product development process and company strategy for functional product development and the identification of the need for new methods and tools to enable better understanding of technology and business processes. The research shows the possibility of evaluating cost and time of development before doing the actual product development work by modelling and simulating the design process. Thus, the knowledge that previously was implicit in the work process is made explicit and possible to manipulate for a desired outcome. Linking the future business cases to work processes by modelling and simulation enables knowledge re-use and work-process predictions concerning cost and time. Hence, modelling and simulation of work processes results in better knowledge of company development capacity earlier than before, thus allowing shorter reaction time to changes in the business domain.